Organizational Negotiations – MGT/445
International negotiations are complex and can be more challenging than domestic negotiations (Lewicki, Saunders, & Barry, 2006). Negotiations between companies in The United States and Vietnam are no exception. Reviewing a negotiation involving C&A Electronics, Inc., Vietnam Telecommunications Services, Inc., and the Vietnamese government will demonstrate a few of the challenges typically faced during international negotiations.
Vietnam had many opportunities for international business agreements; however, the country’s transportation and telecommunications required substantial improvements. C&A Electronics, Inc. supplied a communication switch that could support and enhance the telecommunications systems Vietnam was attempting to implement. C&A Electronics entered negotiations first with Vietnam Telecommunications Services, Inc., and then the Vietnamese government joined the discussions toward the end of the process (Cellich & Jain, 2004).
C&A Electronics wanted to enter a licensing agreement in which it could retain control over the technology and provide the switches based on an agreed-upon schedule. The initial negotiators from the Vietnam Telecommunications Services accepted the proposal and engaged the government for approval. Upon the arrival of the government official, the negotiations changed with new requirements from the government ranging from the transfer of technology, to the exchange of foreign currencies, to employing operational staff.
C&A Electronics did not want to release its technology because the Vietnamese government had a history of not safeguarding intellectual property rights. On the other side, the Vietnamese government saw the value in obtaining and controlling the technology because it was so vital to their economic success. C&A Electronics had a difficult task negotiating the technology transfer issue without trusting the government not to leak information. A release of the proprietary software could be disastrous for C&A. The ending recommendation was for C&A to agree and release the technology with two caveats. The first was that Vietnam Telecommunications Services cannot sell the information outside of Vietnam, and the second was that the Vietnamese government guaranteed not to violate intellectual property rights. If either condition was violated, C&A would prosecute according to international law.
Implications of Globalization and Technology
The C&A and Vietnam case study was a perfect example of the implications of globalization and technology on negotiations. To compete in a global market, Vietnam realized they had to upgrade their telecommunications. C&A Electronics understood Vietnam’s need and had the technology to offer. This gave C&A the negotiating power; however, C&A still had to approach the negotiation with an understanding of Vietnamese culture, business practices, and ethics. International negotiations are more complex than domestic negotiations, but they can be just as successful if the negotiators prepare and understand each other’s environmental context and immediate context (Lewicki, Saunders, & Barry, 2006). For example, even though C&A had technology that Vietnam needed, if C&A had not negotiated with respect to the Vietnamese context, the negotiation would not have been successful.
In the C&A negotiation, technology was the primary focus. Vietnam did not have the technology available, but through increased globalization, they could conduct business with a company from The United States. Advancements in technology create revenue, whether from reducing costs or increasing sales, and therefore are coveted assets. Owning a valuable technology shifts negotiating power, and globalization opens the possibilities for marketing the resource.
The C&A Electronics and Vietnam case study demonstrated the implications of globalization and technology on negotiations. C&A had a technology that Vietnam needed, but C&A still had to negotiate with an understanding of Vietnamese culture, laws, business practices, and ethics. The Vietnamese government required the release of information and C&A had to negotiate to keep proprietary information safe. In the end, both C&A and the Vietnamese government were positioned to benefit from the agreement showing that although difficult, international negotiations can be successful.
Cellich, C., & Jain, S. C., (2004). Global Business Negotiations: A Practical Guide. Mason, OH: South-Western
Lewicki, R. J., Saunders, D. M., & Barry, B. (2006). Negotiation (5th ed.). Boston: McGraw Hill