Strategic Management

Strategic Management Introduction The business environment has in the recent past been experiencing tremendous growth and development. The growth in technology and globalization has significantly impacted on the business environment through increased global activity. These developments have opened up new opportunities and means of production for the business society thus leading to success.Advertising We will write a custom essay sample on Strategic Management specifically for you for only $16.05 $11/page Learn More Nevertheless, the increased global activity as well as the technological innovations have not come singly but have rather raised new challenges for business organizations. The issues of competition, environmental management, and sustainability have emerged thus putting unprecedented pressure on the business community. With this in mind, there has been every need for business organization to identify and develop strategies so as to ensure business success and sustaina bility. The automobile industry has not been exempted whereby the levels of competition have multiplied over the years. The issues of sustainability and efficiency in the use of petroleum oil as the sole source of power have also risen thus calling for adoption of new technologies. Other issues emerging in the automobile industry include the ever rising customer demands on innovative, luxuries and distinctive products. These issues have put undue pressure on the various business organizations operating in the industry thus calling for more efficient and sustainable strategies. BMW which is a key player in the automobile industry has been demonstrating success over the last century. In this essay, key strategic issues in BMW will be reviewed and appropriate recommendations made to enhance the success and sustainability of BMW. Background information of BMW Bayerische Motoren Werke (BMW) is a German Automobile, engine and motorcycle manufacturing company which was founded back in 1917 . The company has its headquarters in Munich, Bavaria, Germany and also owns and produces the mini marquee. The massive production and success of the company has been acknowledged across the globe with a production record of 1,481,253 automobiles and 112,271 motorcycles in 2010. The strong brand name and capital potential of the company is the core elements of the company’s success and popularity across the globe. BMW primarily focuses on the premium segments of the global motorcycle and passage car market (Hill 2008; Martin 2010). The business operations of BMW are diverse with key concern on automobile and motorcycles as well as the provision of information technology services. A point worth of consideration is that BMW markets its products through various channels including company-owned showrooms, subsidiaries, independent dealers and importers. TAdvertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More he production activities of BMW are undertaken across 23 production and assembly plants in 13 countries, whereby it sells its products in over 140 countries worldwide. The massive research and development operations of the company have been of great concern whereby it has been able to adopt the recent technologies in automobile production thus leading to product and service differentiation (Hitt et al. 2009). SWOT Analysis BMW has reported commendable performance and success in the automobile industry for a couple of decades. Being the leading luxury car manufacturer across the globe, the company has been able to position itself among the consumers. The strong luxury car brands owned by BMW, Roll-Royce and Mini have enabled the company to attract and retain a wide population of customers. The competitiveness of the company has been felt across the automobile industry based on the strong brand names and market share commanded by the company. The company has also been under due pressure due to the ever increasing steel prices, competition and need for better technologies (Gerry et al. 2008). Table 1. SWOT Analysis. Strengths Weakness Strong brand image Diversified operations Strong financial performance Efficient and extensive production and distribution network Strong focus on R D Weak performance in Germany Weak turnover ratios Heavy Debt which limits growth prospectus Unfunded pension obligations Opportunities Threats Emerging markets Increasing demand for hybrid vehicles Increasing demand for dual fuel vehicles Growing motorcycles market Strategic alliance with PSA Peugeot Citroen Rising costs of raw materials ELV directive Stringent emission standards Global economic slowdown and particularly in Europe and US Foreign currency risk Increased competition in global automotive market Strengths Strong brand image The company is globally recognized due to its strong brand image. Being the leading luxury car manufacturer, BMW has been able to secure a suitable position among the 10 largest car manufacturers across the globe. The key brands of the company including BMW, Rolls-Royce and Mini have been able to adequately position the company above its competitors. These are among the three strongest premium brands in the car industry thus making the company one of the most recognized far above its competitors (Ranchhod and Gurau 2007). Diversified operations BMW is among the leading diversified companies in terms of geographical operations and market ends it serves. The operations of the company are currently in over 140 countries thus enhancing its global presence. The key geographic regions of the company including, America, Asia, Africa, Oceania and Europe have been able to facilitate the success of the company. The diversified business operations in the automobiles, financial services, motorcycles and information technology services have also yielded great success for the company (RanChhod et al 2004). Advertising We will write a custom essay sample on Strategic Management specifically for you for only $16.05 $11/page Learn More Strong financial performance In the recent years, BMW has shown up its strong financial performance through its consistently increasing revenues. For instance, by December 2007, BMW was able to record revenues of $76,786.1 million which was an increase of 14.3% over the year 2006. The commendable financial performance of the company can be attributed to the consistence increase in all businesses of the company. Despite the impacts of the global financial down turn of 2007/2008, the company has been able to sail through the challenges thus reinforcing investors’ confidence (Martin 2010). Weaknesses Weak performance in Germany Despite that Germany is a huge market for BMW; the company has been reporting declining sales volumes since 2005 in Germany. There has been an alarming negative sales growth of motorcycles in Germany ov er the last couples of years. This phenomenon calls for alarm concerning the success and sustainability of the BMW’s Germany market (Martin 2010). Weak turnover ratios The turnover ratios of BMW are not appealing thus raising questions on its financial stability. In comparison with its competitors, BMW has weaker turnover ratios. For instance, the asset turnover ratio was at 0.7 in 2007. This is low in comparison with other companies like Honda with 1.0 and Volkswagen at 0.8. This weak turnover ratios demonstrates the inability of the company’s management to deploy assets profitability which can in this case affect the company’s top line growth (Martin 2010). Opportunities Emerging markets Emerging markets across the globe are great opportunities for the success and sustainability of BMW. The massive economic growth and development in China and India is a great avenue to steer the much needed growth in BMW. India and China are potential global markets which will definitely drive global demand. The cheap production costs and high technological know how in China and India will enhance fast growth of BMW through mass production of quality and cheap vehicles (RanChhod et al. 2004). Increasing demand for hybrid vehicles Over the recent past, the global population has demonstrated a sharp turn into the demand for hybrid electric vehicles. Influenced by the need for environmental sustainability as well as the rising petroleum fuel costs, the world population is seeking alternative vehicles. Global estimates show that over 4.5 million units of hybrid electric vehicles will be demanded by the year 2013. This can be attributed to the rising energy costs as well as increased emissions regulations. BMW is hereby keen to capitalize on the increased demand thus enhancing its success. The technological potential of the company as well as the active hybrid drive concept will enable the company to demonstrate leadership in the hybrid electric vehicle marke t (Hill 2008).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Increasing demand for dual fuel vehicles Like the demand for hybrid electric vehicles, the demand for dual fuel vehicles is in a constant increase. BMW is well placed in capitalizing on this new market due to its technological capacity as well capital potential (Hill 2008). Threats Rising raw materials prices The success and sustainability of BMW is at jeopardy due to the numerous threats surrounding its operations. The rising prices of aluminum and steel which are the primary raw materials for vehicle production is threatening the success of the company. The ever increasing raw material prices is in turn raising the production costs which limits profit margins as well as limiting affordability of the vehicles since excessive burden is passed to the customers (Martin 2010). Economic slowdown in Europe and US The global economic slowdown in 2008 has adversely affected the US and European markets. The decline in the GDP of these two giants is posing a great threat not only for BMW but the entire business sector. It is worth noting that the unhealthy economic growth of Europe and US has great impacts on the performance of BMW since demand for vehicles is significantly declining (Copper 2008). Stringent emission standards The stringent emission standards established in the automobile industry has unprecedented repercussions on the automobile industry whereby BMW is not exempted. Based on the new directives on emission standard, BMW and other automobile manufacturers will be held responsible for emission performance of the vehicles. These restrictions will not only attract financial losses but also tarnish the reputations of the company’s thus leading to loss of business (Martin 2010). Strategic options for BMW In light with the discussion and analysis on the current situation of BMW, it has been evident that the company is leading success in the automobile industry. The company is well endowed with modern technology in hybrid electric vehicles and has also abundant financial resources as well as human capital. Nevertheless, the company is facing numerous weaknesses and threats which jeopardize its future prospects. In response to these weaknesses and threats, the following strategic options should be considered (Hejiden 2006). Diversification strategy The diversification strategy is one of the most appropriate move for BMW in attaining its growth and sustainability prospects. Market diversification is very appropriate for businesses in competitive industries in the sense that it helps in spreading risks as well as enhancing growth prospects (Kaynak 2003). In order to gain success and sustainability in the automobile industry, BMW should continue with its diversification operations in new markets. Due to the concentration of the European and US markets, BMW should seek new markets. China and India are in this case potential and unexploited markets which BMW should adopt. Since most markets of Europe and America are established and movi ng to age due to the strong brand loyalty, BMW should move to new markets. In order to ensure smooth change and transition to new markets, BMW should put the market diversification strategy into action (Paley 2006). By adopting this strategy, the company will be in a position to consolidate its customer base thus increasing sales and ultimately boosting its profitability. Cost leadership the pricing strategy Despite that BMW focuses on manufacture of luxurious cars, its prices are extremely high thus making them unaffordable to many people. In order to enhance its market performance, the company should resolve to adopt the cost leadership strategy (Steinmann Schreyogg 2005). This can be attained by streamlining all operational activities by cutting down costs. This can be attained through outsourcing of production activities, use of latest technologies in production as well as retrenchment of excess personnel. By doing this, the company will be able to minimize the operational cos ts thus widening the profit margins (Bradley 2005). This will also have significant effects on pricing whereby the company will be in a position to lower prices. As a result of this approach, more customers will find the products affordable thus enhancing sales and profits. Product differentiation In this era of global competition in the automobile industry, BMW can attain success by adopting product differentiation strategy. Consumers across the globe are looking forward to see high tech products to satisfy their needs (Porter 1985). This scenario can not be exempted from the automobile industry whereby manufacturers can differentiate their products by incorporating latest technologies and innovations in automotive production (Pettigrew, Thomas and Whittington 2002). Consumers each day are looking for new and more innovation and technological features to be built in their cars (Muller Lecher 2005). This scenario puts undue pressure for BMW to come up with innovative features. This will help in differentiating its products above those of competitors thus gaining brand loyalty. Research and development is the most appropriate strategy for BMW to attain product differentiation (Palmer and Hardy 2000). It is worth noting that by considering the product differentiation strategy, BMW will be able to establish superior and appealing products (Mintzberg et al. 2005). Technology leadership Being in a competitive industry, BMW has every obligation to demonstrate efficiency and sustainability in its operations. In regard to this perspective, the company can attain success by investing massively on technology and innovations. For instance, the increasing demand for hybrid electric cars puts the company pressure to embark on new technologies (Barney and Hesterly 2009). In this case, BMW should be vigorous in research and developing new technologies to facilitate smooth transition to the new vehicle models. BMW should consider various approaches for enhancing its products by adopting the concepts of active hybrid program, intelligent energy, and innovative technologies like iDrive. By adopting these strategies, BMW will be in a position to position itself above its competitors. On the other hand, the company should also focus on innovative features on its services (Besanko et al. 2004). For instance, driver-focus services and reinforce mobile service should be researched on and fitted in the vehicles. In regards to hybrid electric vehicles, BMW should be in the forefront in ensuring technology leadership. For instance, the company should put into practice the hybrid dive concept together with other innovative strategies (Clegg et al. 2005). By so doing, BMW will be able to position itself above competitors hence enhancing success. Customer relationship management Customer relationship is an aspect of key concern in the contemporary business platform. BMW should hereby be efficient establishing effective strategies and structures for customer relatio nship management (Thomas 2007). One of the main approaches in customer relationship management is establishment of a customer care department. This will facilitate communication and interaction between the company and the clients. Customer care services will help in collecting customer feedbacks which helps in ensuring customer satisfaction (Ferrell and Hartline 2010). Market research and analysis should also be considered which will in this case help in enhancing product design to match customer taste and preferences (Timmers 2008; Sadler Craig 2003). Conclusion and Recommendations Based on the above discussion and analysis of the current situation of BMW it is evident that the company is potential of sustaining its success. The SWOT analysis of the company has placed BMW far above its competitors due to its strong financial, technological and human resource potential. In order to attain continued success and sustainability in the automobile industry, BMW should adopt the above st ated strategic options. The key strategies including technological leadership, cost leadership, pricing strategy, market diversification, product differentiation, and customer relationship management should be put in pace. By considering the above discussed strategic options, BMW will be able to realize its growth and profit maximization objectives. References Barney, J. B., and Hesterly, W S 2009, Strategic Management and Competive Advantage:  Concepts and Cases, Prentice Hall, New York. Besanko, D. et al 2004, The Economics of Strategy, John Wiley Sons, New York. Bradley, F. 2005, International Marketing Strategy, Pearson Education Ltd, New York. Clegg, S. et al 2005, Managing and Organizations, Sage, London. Copper, I. 2008, â€Å"America in recession†, Wealthy daily. Web. Ferrell, O. and Hartline, M. 2010, Marketing Strategy, South-West College Publishers, New York. Gerry, J. et al 2008, Exploring Corporate Strategy, Pearson Education, New York. Hejiden, K. 2006, Scena rio: The art of Strategic conversation. International studies of  management and Organization, Wiley Sons Press, New York. Hill, T. 2008, â€Å"The new change in automobile industry,† The Washington, vol. 2 no. 3, pp. 30-35. Hitt, M. et al 2009, Strategic Management: Competitiveness and Globalization: cases, Routledge, London. Kaynak, E. 2003, The Global Business: Four Key Marketing Strategies, Routledge, New York. Martin, T. 2010, Strategic Management, Prentice Hall, New York. Mintzberg, et al 2005, Strategic Safari-A Guided Tour through the Wilds of Strategic  Management, Free Press, New York. Muller, S Lecher, T 2005, Strategic Management, Routledge, London. Paley, N. 2006, The Manger’s Guide to Competitive Marketing Strategies, Thorogood, London. Palmer, I. and Hardy, C 2000, Thinking about Management, Sage, London. Pettigrew, T. and Whittington, T. 2002, Handbook of Strategy and Management, Sage, London. Porter, M. 1985, Competitive Advantage: Creating and S ustaining Superior Performance, Free Press, New York. Ranchhod, A. and Gurau, C. 2007, Marketing Strategies: A Contemporary Approach, Prentice Hall, London. RanChhod, A. et al 2004, Marketing Strategies: A Twenty-First Century Approach, Prentice Hall, London. Sadler, P. Craig, J. 2003, Strategic Management, Kogan Page, London. Steinmann, T. Schreyogg, T. 2005, Management, McGraw Hill, London. Thomas, H. 2007, â€Å"An analysis of the environmental and competitive dynamics of management Education,† Journal of Management Development, Vol. 26 no. 1, pp. 9-21. Timmers, P. 2008, â€Å"Creation of value chains,† Electronic Commerce, Vol. 1 no. 1, pp. 182-193.

Rules for Maintaining a Professional Relationship With Your Colleagues

Rules for Maintaining a Professional Relationship With Your Colleagues There are great companies out there- even companies that genuinely set good priorities to take care of their employees. But it is important to remember that you remain in a business relationship with your company and your boss. At the end of the day, no matter your loyalty or their friendliness, you are just a resource to a company- one of many. There are also terrible companies, who never even pretend to care about their employees’ wellbeing. Either way, it’s important to be savvy, and to learn how to conduct yourself in business transactions with your eyes open- to make sure you protect yourself.Here are a few rules of thumb to keep in mind.Don’t be buds with your boss.As tempting as it is to be your boss’s BFF (you get along like a house on fire, you have tons in common, you finish each other’s sentences!), it’s not always the best idea. First, there could be gossip from higher-ups and lower-downs if your promotion or bonus (however well-d eserved) is seen to be a favor from the boss-your-friend. By keeping your boss at a bit of a respectful arms’ length, you avoid any accusations of favoritism, inappropriate conduct, mercenary behavior, even â€Å"sleeping your way to the top.†It’s also best to keep secrets secret in a relationship with a power differential. Don’t spill your skeletons and don’t give your boss the opportunity to spill hers. Remember: you can’t un-know whatever you learn. So if you can’t separate what’s business from what’s personal, and you’re just starting out in your career, it might be best not to get in too deep until you’re sure you can handle the extra intimacy.HR is not your friend.You may think HR is a magic watchdog, protecting employees from all kinds of wrongdoing. But you’d be wrong. While they are there to manage your concerns and occasionally police wrongs, they’re mostly doing these things for the good of the company, not the employees. Remember who pays their salaries. They will always pick the needs and interests of the company over you, the little guy. With a few exceptions, you are â€Å"human capital† to be managed, according to HR. Don’t distrust them necessarily, just learn to function without thinking you need them as some kind of hall monitor for right and wrong.Keep a job offer handy.As often as possible, make sure to have a job offer in your back pocket. When you feel wanted, you work much better and much harder. And when you’re wanted by someone else, your boss looks at you as if through magic rose-colored glasses and sees your value double! Even if you have to hunt undercover (i.e. if your HR department gets really shifty when you update your resume), it’s a good idea to have an exit strategy to keep your ego up in times of stress. Keep looking, even when you already have a job.Your network is your best friend.Your professional networ k doesn’t have to be this scary thing that’s all work all the time. You can make it a truly social thing, you can even make friends. Build a group of like-minded contacts whose interests match up with yours and whose intellectual pursuits and career moves inspire you constantly to do and be better. Keep in touch with them. Do them favors and then ask for a few for yourself. Congratulate old office mates on new jobs. In short: be a good friend to your network contacts and soon they will start to feel like actual friends.Know when to quit.If you’re not happy in a job, it might be time to cut and run. Use that extra handy offer you’re keeping on hand, and use it to get to a better place for you and your career.

Nursing assessment Essay Example | Topics and Well Written Essays - 500 words

Nursing assessment - Essay Example Having noted all the foregoing findings, the three immediate nursing actions for Miss Jones would be: 1) To assess causative and precipitating factors, 2) to evaluate degree of excess fluids and 3) to promote mobilization/elimination of excess fluids (Doenges, Marilyn E., Moorhouse, Mary Frances, pp. 224-225. Assessing the causative and precipitating factors will involve the anticipation of cardiac failure, so it is essential to regularly monitor her breathing along with oxygen level infusion. Aside from this, the fact that a rapid infusion of IV fluids could transpire, the drip rate of the patient’s IV fluids must be checked constantly and adjusted to normal limits (Olsen, June Looby, Giangrasso, A.P., 2000). All fluid intakes must be noted as to its source and volume. Similarly, the amount of sodium and potassium intake must be observed and noted in relation to ingested food, drugs and IV infusion. The second immediate nursing intervention is: to evaluate degree of excess fluids present within the individual. This second nursing action requires constant monitoring of vital signs (Medline Plus, 2007) to observe whether a change has occurred from the last charting schedule. of any related complications that may occur. In relation to this, the present weight of Monica Jones must be compared to previous stated or admission weight since increase of weight could indicate that fluid is being retained in the body. Regular auscultation of the lungs for the presence of crackles must be done and charted during this phase of intervention to see whether the crackling sounds that were previously heard have increased or diminished. Recording the occurrence of dyspnoea is equally essential within this secondary phase of nursing intervention, to note whether hard labour breathing is continuous or takes place only when triggered by an environmental stimuli. In accordance with

Journalism and Diversity Term Paper Example | Topics and Well Written Essays - 2000 words

Journalism and Diversity - Term Paper Example This paper tells that the notion of responsible media got recognition through the Hutchins Commission on Freedom of the Press in the United States. The World Association of Press Councils realizes that the freedom of the press must be responsible to the public cause, if not the government. It announces that â€Å"it is implicit and inherent in the institution of a free press that the press exercises its powers and duties in a responsible manner† (The Law Reform Commission of Hong Kong, 2000, p. 2). Clause 12 of the Press Complaints Code deals with discrimination issue regarding reporting of news, guiding journalists not to mention the race, color, religion, sexual orientation, physical or mental illness or disability of a person unless these are required actually to complete the story. The purpose behind this clause is to secure people from biased reporting and the news publication does not harm the common public interest. Journalists need to differentiate between the lines, c rossing it only when remarks are made generally about various sections of people on a reporter’s individual capacity to write that is politically correct and a decision cannot be easily made without harming others’ right of freedom of expression (Beales, 2009). The purpose of the Code is to draw a line, remaining within which won’t create any clash between the right of the public to freedom of speech and the rights of a person not to be exposed to biased personal abuse. Regarding the right to freedom of expression, having a different opinion is the right irrespective of the matter whether it is not to others’ liking or others mind it (Beales, 2009). With the increasing trend of media taken to the court over its expression of public opinion, the responsibility of the press has increased to report daily news in a controlled way. Past examples of various news reporting can help in drawing a line between taking the freedom of publishing news, for example, the British media took restraint by not publishing the contentious Danish cartoons of the Prophet Mohammed, although they were not bound by the Code not to do so. On the same length, the sarcastic advice of a national newspaper columnist to wire the county streets to decollate cyclists created anger among the audiences but it was not the violation of the Code on the part of the columnist but because the remark was not aimed at any individual and the columnist also published an apology, the matter was amicably settled (Beales, 2009). Nevertheless, pejorative or prejudicial aggression at selected people is against the spirit of the Code. For instance, making fun at the disabled son of Katie Price, the showbiz model from Jordan became a controversial issue; the PCC was flooded with complaints from readers and also from Ms. Price and her husband, Peter Andre. The issue could only be settled when an online and in-print apology was made by the magazine besides making the donation to the char ity (Beales, 2009). The Code comes to the rescue of those individuals who are targeted and victimized but complaints made by the third party do not come under the arc of the Code until the sufferer agrees to support the complaint. Journalists are advised to apply restraint in reporting matters of public interest by the PCC. Even if no claim of discrimination is made by any individual, PCC can take action under other sections of the Code like Accuracy. For instance, the PCC issued the guidance note on asylum seekers indicating that it was wrong to assume asylum seekers as illegal. They are legal so far as they are not denied asylum.

Consider the bases for motivation for terrorism. Discuss with Essay

Consider the bases for motivation for terrorism. Discuss with reference to a range of illustrative groups and action to counter violent political radicalisation - Essay Example responding are leading to a re-evaluation of what is needed to alter the affiliations with these specific groups and the agendas that they are working to fulfill. The more that is understood and analyzed about the groups, as well as the counter – actions that are taken, the more likely that the correct responses can be taken to change the rebellion against political and social arenas. The definition of terrorism is one that has grown in current years. The explosion of terrorism as a cultural affiliation began after the World Trade Centers in 2001, which caused destruction to the United States buildings and created a strong cultural and political response from America. The particular attacks led to the new terrorism, and have led to a rise in the amount of terrorist groups that are spotted around the world, especially since the 1980s. There are several definitions and identity concepts that are affiliated with this. Terrorists are known to consist of either a fanatical religious group or one that holds a political agenda. Fanaticism, rather than political interest, is usually at the base of motivation for terrorism. However, non – traditional terrorism, which consists of political agendas that are intertwined with religion, as well as the responses from groups, is prevalent. The rules for groups have led into more destruction and chaos that is created as we ll as the belief that self – destruction is honorable when being a part of war and terrorism (Morgan, 7, 2004). There are several types of terrorism that are a part of different focus groups around the world. Each has specific agendas and initiatives that are related to politics and society, as well as the need to achieve specific goals in relation to philosophies held by the groups. The new terrorism, which has developed as a part of the 20th century, has created a different understanding and analysis of terrorist groups and their agendas. The main focus of new terrorism is one that is not

Intellectual and Cognitive Development Essay Example for Free

Intellectual and Cognitive Development Essay Intellectual and Cognitive Development Explain the sequence and rate of development Age Range 0-3 Months Babies at this age are learning a lot about their parents they are beginning to recognise the sound of their voices, especially Mums voice and smell, they may stop crying when Mums voice is heard. 3-6 Months Objects and toys become very interesting to babies at this time. Toys are explored with fingers and mouth. They are very alert. 6-9 Months Around this time babies will cry when their primary carer leaves the room but then around 8 or 9 moths learn that people and objects do not disappear but continue to exist even when they are out of sight. 1-2 Years At this time in their life they recognise routines throughout the day, babies may get excited when they see a familiar face or toy or when a bib is put on for feeding. They enjoy toys that they put things in to containers and out again, they may pull off hats and socks repeatedly. They also respond well to brothers and sisters. 2-4 Years Children begin to know what they like and play with the same games over and over again. They like pretend play games like drinking from an empty cup or dressing up in clothes of their heros. 4-7 Years This is the age they gain load of confidence and co-ordination. They start school and learn to read, write and count they also do simple maths. -12 Years By this age children are well co-ordinated, the way children think and reason is reflected in their play, they are much more organised and focused. 12-16 Years Children of this age have learnt how to solve problems and have an understanding of reasoning. 16-19 Years Decisions have to be made at this tae of ones life, if to stay in education or to find a job. If leaving your familiar environment you have to embrace new settings, rules and people.

Chinese And Americans Negotiations Style

Chinese And Americans Negotiations Style China has been becoming a key player in the world stage since last two decades for her rapid development of economy ¼Ã…’military force and so on. More and more countries regard China as an emerging market for her huge potential market and big amount of potential target customers; therefore, many countries want to operate business in China. According to the survey, America is one of the biggest business partners of China; it continues to maintain Chinas second largest trading partner, bilateral trade amounted to 102.34 billion U.S. dollars, an increase of 11.4%. Among them, Chinas exports to the U.S. $ 74,300,000,000, an increase of 6.9%,more than a quarter of accelerating 1.5 percentage points over the same period accounted for 17.5% of the total value of Chinese exports; imported 28.04 billion U.S. dollars from the United States, an increase of 25.6%, trade surplus of 46.26 billion U.S. Dollars. As trade increases, more and more American companies have chosen to develop the Chinese market. While the problem also appears, it is difficult to negotiate with the Chinese. With the 5,000 years Chinese traditional culture, many multinational firms realized that China has her own negotiation style. This issue was mentioned by Lucian Pye (1992, p.74, cited by Tian, 2007), the Chinese may be less developed in technology and industrial organization than we, but for centuries they have known few peers in the subtle art of negotiating . When measured against the effort and skill the Chinese bring to the bargaining table, American executives fall short. From the above background, we can see that if the foreign business people want to do business in China, learning Chinese negotiation style is very important. With inadequate knowledge and skills of Chinese negotiation style, it will be difficult for Americans to succeed in striking a desirable deal with Chinese partners and in developing business in China. For this aim, this essay will do a systematically analysis on how to negotiation with Chinese, particularly for the Americans. This essay aims for set out how to understand Chinese negotiation style and find out the differences of negotiation styles between Chinese and Americans, to provide useful information on how to achieve a win-win object. In this essay, the main body will be the analysis of Chinese negotiation style. Section one will introduce some fundamental information of negotiation; in section two, the Chinese culture roots will be illustrated; in section three, the comparison of negotiation style between Chinese and Americans will be indicated; in section four, the conclusion will be given which is even though there are many differences among negotiation styles, the common rules still existed among these countries. Negotiation Based on Tian (2007), there are two parts contribute to negotiation process, which are common interests and conflicting interests. However, many scholars hold divergent views from different perspectives. From the social exchange theory, it defines negotiation as a process, which focus on problem-solving communication for both parties aims for a win-win agreement (McCall and Warrington, 1984; Graham, 1986, cited by Tian, 2007). Which means it focuses on how to maximize the benefits accruing to all parties. Therefore, it can be seen there is a positive relationship between two parties without hurting each other, the conflicts will also be addressed in a way that benefits all. Specifically, social exchange theory insists on a cooperative strategy of negotiation. This implies that both parties need to collaborate with each other and unify the interests of all aim for achieve mutual benefits. The cooperative strategy is illustrated as principled negotiation. As a principled negotiation, it focuses on: separate the human from the problem; focus on benefits rather than positions; options for mutual benefits; insist on objective criteria and no tricks and posturing. In all, the negotiation parties can gain from negotiation in a decent and fair manner. (Tian, 2007). Another theory is the game theory. This theory emphasizes on a win or lose agreement. It considers negotiation as a process that both parties communicate with each other in a competitive manner. (Raiffa, 1982; Siebe, 1991, cited by Tian, 2007). It defines negotiation as each party wants to maximize its own benefits at the cost of the other side. During negotiation all the parties can fight with one another in order to maximize their own interests. Hence, we can see that game theory is based on a competitive strategy. The third theory is called cross-cultural theory. This theory focuses on a specific type of negotiation, which is the different culture background. It indicates that different cultures may lead to different negotiation styles. Based on Tian (2007), game theory and social exchange theory have few implications on negotiation process, while the most influential factor is negotiators from different culture backgrounds need to have a basic understanding of each others cultural environments and negotiation styles; this will very helpful on the success of negotiation. In this essay, we will focus on the cross-cultural negotiation style to analysis the Chinese and Americans negotiation. Cultural roots of the Chinese negotiation style Lots of scholars argued that Chinese culture can be divided into two aspects; one is traditional Chinese culture, the other one is contemporary Chinese political culture (Tian, 2007; Fang and Ghauri). Traditional Chinese culture Confucianism is one of the most influential factors on Chinese negotiation style. There are six basic Confucian values. Firstly it emphasizes on moral cultivation. It regards trust and sincerity as the most important qualities. Secondly, it thinks highly of interpersonal relationships. Guanxi is a major mechanism in the Chinese social psychology. Thirdly, Confucianism pays attention on family and group orientation. The fourth factor is the respect of the age and hierarchy. Being a Chinese who needs to show respect to the aged people; for hierarchy, people should does his duty to contribute to social harmony and stability. The fifth factor is harmony first. Confucianism highlighted the need aim for harmony in the whole society by moral conduct in all kinds of relationships. The last factor is face, Confucianism educated the people they all should have a sense of shame in their minds. Face is a fundamental moral mechanism on Chinese way of life. (Fang and Ghauri). Sun Tzus stratagems: which known as Ji or Chinese stratagems, has a huge impact on Chinese strategic business behaviour. Sun Tzus provides Chinese with various kinds of solutions when facing different situations; how to gain psychological and material advantage to achieve ones purpose. Chinese negotiator is often Sun-Tzu-like strategist, seldom wages a physical business war but rather might be keen on a psychological wrestling of wit to create a favourable situation to manipulate his/her counterpart into doing business his/her way. (Fang and Ghauri; Chas.W, 1999). The most popular part of Sun Tzus stratagems is the Thirty-six ancient Chinese stratagems. Agrarian mentalities: China has a large agrarian population fir over 4,000 years. Even during the Cultural Revolution during 1966-1976, millions of students in urban areas were sent to the countryside by Mao Zedong to let them re-educated by the peasants. Even though most of the students went back to the city they still passed their re-educated values gained from countryside to their off springs; which is completely different with western countries. Based on many scholars research, (Tian, 2007; Graham and Lam; Pye, 1992), thrift and endurance are the most outstanding characteristics of the agrarian mindset when Chinese negotiating. So the agrarian mentalities continue to have a big influence on the way of thinking of the Chinese. Political Culture Mao Zedongs bureaucratic heritage and Deng Xiaopings pragmatism are the most important political cultures in China. Mao Zedongs bureaucratic heritage: this political culture based on orthodox Marxist-Leninist ideology with three main features. Firstly, the leader of the party has the biggest power on political and personnel. Secondly, fragmented and stratified bureaucratic agencies. Different ministries, province governments, government departments and agencies bargain and compete with each other over allocation of limited resources. Bureaucrats typically have good skills of bargaining within the system. Thirdly, the art of survival in the bureaucracy was responsibility avoided. The reason for this is how the unique bureaucratic system works. In China, power means everything especially in political, therefore, everyone tried very hard to avoid mistakes so they can stay at the office as usual. Some of them do everything based on orthodox Marxist-Leninist doctrines, some shifting responsibilities onto the others. Deng Xiaopings pragmatism: Deng is the leader of China economy reform which begun with market-oriented economy reform. During the reform period, Deng had to overcome the political barriers left from the previous period. Therefore, Deng promoted a pragmatist ways of thinking within the Party leadership, which has fundamental changed the political beliefs, attitudes, values and feelings of Chinese society at larger ever since. Dengs theory emphasized on practice rather than theory means. Moreover, Deng also promoted that white or black, it is a good cat as long as it catches nice, in his view, as long as China can achieve economic development and modernization, no matter what kinds of the measures are, the measures should be taken. From the above analysis, we can say that China not only has her own traditional culture, but also has her complicated political culture. All of the factors have big impact on Chinese negotiation style. The differences between Chinese negotiation and Americans negotiation Politics influence ¼Ã… ¡Lots of scholars pointed that, China always has a huge negotiation team but with little power on decision-making. (Adair, et al, 2001; Ghauri and Fang). To be specific, this power refers to the negotiation team power. The key reason to this phenomenon is in China, it is hardly to separate business from politics. In the Chinese Communist culture, they think politics is all-pervasive while on the contrast, Americans believe that business and politics should be separated (Pye, 1992). Ghauri and Fang also pointed that, if you want to do business in China, you should pay enough attention to the Chinese government because the government is the biggest boss and Chinese enterprises are just their factories. Chinese economic structure is more centralized while Americans is more open and free. They also indicated foreign firms should be sensitive to the guiding principles of Chinas social and economic development set forth by the Chinese Communist Party and the Chines e government, and also, should make a careful study of the Chinese governments priorities and implementation policies. In the contrast, Americans regard business is business and politics is politics, which are totally different aspects in the negotiation process. Legal Influence: The Chinese consider the interpersonal relationship is more important than legal contract, which is totally different from Americans. As Pye (1992) mentioned, Chinese culture traditionally shuns legal considerations and instead stresses ethical and moralist principles, whereas Americans are thought to be highly legalistic. So historically, Chinese and western cultures has quite different views about the importance of legal process. The Chinese seem to be bound by their tradition non-legalistic practices. Tian (2007) also indicated that, the Chinese negotiators do not pay much attention to legal agreement as western people do. They focus more on interpersonal trust, friendship and guanxi. Some American businessmen argued that they learned that among Chinese it was a traditional way to seal agreements with only the oral commitment, a nod of the head, or a handshake (Pye, 1992). This Chinese negotiation style is closely related to the Confucianism that required people t o appreciate interpersonal relationships rather than laws and legal regulations; and also, it is a reflection of emphasizes on the harmony. In the contrast, Americans consider legal contract is much more persuasive than personal relationship. As Pye (1992) indicated that the majority of American negotiators are lawyers, which means that the Americans consider the contract is the most important part of negotiation. Holistic Thinking: Graham and Lam pointed that; the Chinese always consider the question from a whole picture; however, the Americans think sequentially and individualistically. Chinese negotiators always start negotiations on the general principles first and leave details to the later stages (Tian, 2007). Also, Pye (1992) pointed the Chinese seek agreement on generalities, dwelling on overall considerations, and avoiding specific details as much as possible, leaving, as they like to say concrete arrangements to later negotiations. But the Americans are more in favour of solve problems one by one. Why the Chinese like use this negotiation style? The reason can be considered consistent with Maos bureaucratic heritage; the party leaders always set the general principles and the followers had to agree upon before any details can be discussed. According to Pye (1992) and Tian (2007), some western businessmen argued this as a negotiating ploy. They argued that Chinese negotiators can take advantages of the signed general principles at the later stage of negotiations. This ploy is quite obvious when it comes to the specific details. Assume that both parties were arguing about details while at this moment, Chinese negotiators can attack the other side for not complying with the general principles signed earlier. Therefore this can be called one of the thirty-six stratagems-shut the door to catch the thief. Nevertheless, even the western businessmen consider this as a ploy it still has its advantages. Pye (1992) said that Chinese can quickly turn an agreement on principles into an agreement on goals and then insist that all discussion on concrete arrangement must foster those agree-upon goals. This measure is useful during negotiation process approved by a American: by making each agreement between us move from a more general to a more technical level, the Chinese can constantly argue that what they were insisting upon in operating procedures was logically consistent w ith all that had been agreed to before.they sure taxed out patience and always put us on the defensiveà ¢Ã¢â€š ¬Ã‚ ¦ Information exchange (emotional aspect): the Americans pay more attention on the information exchange during negotiation process; they can accept the discussion as main method to solve the problems, even the discussion is very intensive. In contrast, the Chinese are focusing whether the counter party gives their face or not. In Chinese business culture, ones reputation and social standing rest on saving face. Assume that foreign businessmen cause the Chinese embarrassment or lose face, even unintentionally; it can be disastrous for negotiation process. Moreover, Tian (2007), Ghauri and Fang, found that face is extremely important for Chinese. They argued that if someone gives enough face to the Chinese negotiators, they will behave as a Confucian gentlemen otherwise they will return you back or set block in the negotiation process. Therefore, from this perspective we can see that compared with the Americans, the Chinese are thinking highly of face. Time issue: Americans in favour of fast meeting when negotiation, while the Chinese need much more time to build the trust with counter party before negotiation. The reason is influenced by Confucianism; Chinese only do business with someone they can trust; while trust building is a time-consuming issue. As one Chinese negotiator said they [western firms] want to come and sign the contract quickly and do not know that [if] we do not understand each otherà ¢Ã¢â€š ¬Ã‚ ¦there is no business relationship first, we have to know and trust each other, and then we sign the contract!(Ghauri and Fang). Patience: Compared with the Chinese, Americans are more impatient. As long as an initial agreement has been reached, the American negotiators become more than ever impatient for the consummation of a deal, for they tend to assume that the step from general agreement to detailed substantive negotiations should be a short one (Adair et al, 2001). In many cases, the impatience of the Americans is fuelled by the fact that it is not convenient, or economical, to keep their entire negotiating team in China doing nothing (Pye, 1992). For the Chinese, however, this may be the time for substantial delay. The officials who have been talking with the Americans may not have the authority to go further and must wait for the further instructions. The Chinese are also short of expert talent and thus lower officials may have to await the clearing of bottlenecks in their own hierarchies. Also, Chinese cadres often seem genuinely to feel that once there has been an agreement in principle, congratulati ons are in order, and therefore, they are in no hurry to get into the potentially troublesome haggling over details. Negotiation team: the Chinese negotiation team tends to be a large one but indecisive compared with Americans. According to Tian (2007), a western businessman pointed that it is common that lots of people from carious government departments and commissions (such like planning, economic and foreign trade commissions and the like) get involved in the negotiation team. Apart from government officials, some representatives from various departments of the Chinese company are often also invited to participate in the negotiating team, aims for avoid possible non-collaboration in the long term. The feature of the Chinese negotiation style is related to Maos bureaucratic heritage. Economic planning has been playing a key role even after reform since 1978; consequently, fragmented bureaucratic institutions have to maintain control over specific resource, which is even true at the enterprise level. As a Chinese negotiator admitted when it comes to negotiation of a lager project in which various departments are involved, if you do not ask each of these departments to come, they will probably make complaints and wont support your work very much in the futureà ¢Ã¢â€š ¬Ã‚ ¦therefore, in order to coordinate our work, we asked every department to send one representative to form our negotiating team (Fang, 1999, p.208, cited by Tian, 2007). Nothing is ever final: Americans hold the view that once the contract being signed, then all the parties should show up the expected behaviour in a fixed time; aims for perform the contract in time. The Chinese seem to have less feeling for the drama of agreement and little expectation that any formalized contract will end the process of negotiations. Lots of western negotiators argued that the Chinese brought up proposals for revising what had been agreed upon, right on the heels of signing a contract. Thus although they are reportedly scrupulous in adhering to agreements, they have no inhibitions in proposing changes. What is more, the Chinese officials do not seem troubled by the thought of suddenly terminating contracts; or in other words, the Chinese do not stick to the contracts as Americans do. As mentioned above, the Americans are more legalistic, but the Chinese think the sudden change or termination of the contract do not have influence on the relationship between the weste rners while this is completely different compared with the Americans. In Americans view, once the agreement being signed, the negotiation process is over while the Chinese always tend to continue the process with continuously new questions (Pye, 1992). Chinese stratagems: The Chinese more likely to use stratagems during the negotiation process, while the Americans always being honest and humorous. Lots of scholars pointed that the Chinese in favour of using stratagems (Ji) during negotiation, which is too hard for them to identify (Tian, 2007; Fang, 2006; Miles, 2003). For example, when Ericson entered China during pre-negotiation stage, the Chinese changed negotiators suddenly, was being regarded as steal the beams and change the pillars, as mentioned above, the Chinese only doing business with the people they can trust with, without solid trust it is hardly for them to be truly honest, therefore they will use stratagems. As one negotiator admitted that they used the stratagems unconsciously but the stratagems occupied more than 10% in the negotiation process. Using stratagems, for the Chinese, is deeply influenced by the traditional Chinese culture. Risk-taking: Americans are the risk-takers compared with the Chinese. They are often prepared to put forward new and innovative ideas, suggestions. This is often done without prior approval from headquarters and represents the risk the head of delegation is prepared to take, in order to reach consensus. This trait is widely recognized and highly respected by other delegations. Compared with the Americans, the Chinese negotiators are more conservative during negotiation, without any back guarantee or the higher direction from the upper level, the Chinese negotiators tend to be very careful, speak and act cautiously (Adler et al, 1992). Price-sensitive: the Chinese are sensitive to price. Lots of foreigner negotiators said that the Chinese often keep asking for lower price during the whole negotiation process. This difference compared with Americans discussed in almost all the influential studies on Chinese negotiation styles. Such like Tian (2007), Pye (1992). This sensitivity closely related to the Chinese agrarian mentalities, which emphasized thrift. It also related to Dengs pragmatism, based on the backward reality of China, which is, the resource is very limited that the Chinese have to pay attention to the cost issue. Moreover, the Chinese would think that we have provided you with a huge market with huge potential profits; you need to give us favour back. The similarities between Chinese negotiation and Americans negotiation Protectionism: some scholars argue that the Chinese always being protective to the local industries, especially for the national key industries, such like IT, telecommunication industry. It is probably the common phenomenon in every country. Lately Huawei, the Chinese telecommunication enterprise wanted entered America but rejected by the national security department for the reason that the telecommunication is a key industry and it also consistent with the national security (Xu, 2011). From this we can see that, no matter China or America, both of them pay special attention to the key industries. Pragmatic: The Americans tend to be very practical, pragmatic ones. They do not interest in high-flown rhetoric or speeches in the negotiation process. As the Chinese, they are very practical people as well. They have the clear purpose when negotiation, which is obtain the favour and reach the win-win result. Conclusion In this essay we mainly analyzed the differences and the similarities of the negotiation style between Chinese and Americans. It is hardly to give a definite conclusion which is better than the other one. But for China, there are four points for them to amend compared with the Americans in the negotiation process in the future. Firstly, the Chinese should learn from the Americans they prefer the legal contract rather than the personal relationships. Since nowadays, China is getting more involved in the world business, facing various kinds of counter negotiation parties, different cultures around the world, the business need to base on the legal contract. It should be seen as a secure for the business. With the rapid development of economic and culture, legal, is becoming a main method to protect the rights and interests between the people, the Chinese should recognize this. Secondly, the huge but indecisive negotiation team should be improved. Due to the unique culture of China burea ucracy, the Chinese negotiation team always bigger than its actual needed. This is a waste of human resource; also, each department of the government should be separate from each other, each performs its own functions, if so, the efficiency of negotiation will be enhanced better. But to achieve this target, it will take a long time and the joint efforts of all departments. Thirdly, the Chinese always behave nothing is ever final even the contract signed already. This is a performance of bad faith; it is harmful for the Chinese to continue doing business with the foreigner partners. In other words, the root cause of this phenomenon is the indifference of Chinese legal concept. For the Americans, they should learn from the Chinese being patient when negotiating, it is easy to make loss due to the decision made when lost impatience.