ENGL307
Organizational Communication
CHONG SANG YI (SANDY)
KWOK LI HO (LIKKO)
YEUNG FUNG YEE (LEA) 13024838D
Sharpo
UK cutlery supplier
Jane, Managing Director
Clive, Sales Director
Chen Ke, Chinese Negotiator of Sharpo
HR Department
Production Department
The Story begins with…
April 2004
A buyer for a major UK high street retailer
approached Sharpo
Negotiation:
Clive, Sales Director of Sharpo
A buyer for a major UK high street retailer
Situation
Clive enters negotiation on his own
Clive’s colleagues:
1. Out of office
2. Regional meeting
3. Homeworking
Roleplay
Clive
UK Retailer (Sales Direct
of Sharpo)
Negotiation with UK Retailer
UK Retailer Requests:
1. Supply a range of cutlery
2. Same cutlery design as a market-leading
range produced by a major European
manufacturer
3. Modify design cosmetically to avoid
copyright infringements
4. Reduce target cost
5. Supply exclusively to them
Discussion
What’s wrong with Clive?
Negotiation with UK Retailer
Clive:
1. Colleagues are not around
2. Speed and ease
3. A very important customer
Clive might have negotiated
the business deal more
effectively…
The initial deal with retailer:
Mistake 1: No preparation
Gather all relevant information before the negotiation even it
may ruin the business chance.
eg. production plan from production manager,
financial position of the company from finance director, etc.
Mistake 2: “Reciprocity”
Clive accepted all of the demands
Clive can make counteroffers like:
“exclusive only for the first few
years”
“could be sold to other retailers for
limited amount” in the bargaining
section.
Mistake 3: “Delayed liking”
Over gratification shouldn’t be shown
Create room for making concession by setting a
bargaining range
The negotiation after the
market downturn in UK:
Clive fell into the trap of “The fixed-pie perception”--- A
belief that two parties’ interests are completely opposed
(What I want is what you want).
Clive thinks the Retailer
retailer’s exclusive thinks Clive wants
sales demand is to maximize the
for protecting profit.
their market share
But Clive’s target
But the retailer
is to boost sales by
concerns their
widening sales
profit most.
channel.
To understand opponent’s intangible needs, Clive
may provide alternative packages for the retailer to
assess differences in priority towards the issues.
For example, if the retailer concerns:
Securing their profit earned: promise to share
certain percentage of the profit
(Trading off profit with wider sales streams)
Exposure of their brand name in the market:
promise to add their company logo and name
on the packages of cutlery
Persuasion:
Logos:
A decline in sales of the cutlery and overstocking
are objective facts, if the problem is left alone, both
parties will suffer (threatening)
Cooperation with more retailers can scatter the risk
and the burden of advertising expense/ production
costs among new investors.
Pathos:
“We have signed the contract with you and we forgo
the chance to do business with other competitors of
yours!”
Ethos:
Seek consultation from organizations like British
Chambers of Commerce (BCC)
“The snare”:
Facing tough opponent, one can use distributive
negotiation style (win-lose) instead of the integrative one
(win-win) as the final counteract.
1. Putting pressure on something that the opponent is
impossible to give you but in fact you don’t really want it.
2. suddenly give up this fictional demand
3. pretend to be making a big concession.
Opponent feels owe you and will be less insist on other
issues which are your true interests.
The negotiation between
Clive & his colleagues:
•Should honestly present the retailer’s requirements
•Whether the deal is worth or not is subject to directors’
consideration
•If Clive still wants to close the deal, he may use the power of
contrast to show the business potential with the retailer is
the highest among the others.
Using positive language
Examples of question for effective negotiation:
Open-ended Question:
• Encourages others to reveal underlying feelings
• e.g. “What do you like most about the deal?”
Reflective Question:
• show your understanding on the others and keep their
focus on the common ground, not the dispute
• e.g. “...so you think the retailer could…”
Hypothetical Question:
• Help testing your proposition
• “What if the retailer requires this instead of that? Will
you then accept it?”
Negotiation with UK Retailer
UK Retailer Requests:
1. Supply a range of cutlery
2. Same cutlery design as a market-leading
range produced by a major European
manufacturer
3. Modify design cosmetically to avoid
copyright infringements
4. Reduce target cost
5. Supply exclusively to them
To meet the requests…
1. Use cheap materials
2. Source from overseas (China, Pkistan or
Thailand)
Sharpo’s Decision
Location: China
Hiring: local employment agency in China
Situations of Sharpo
No knowledge of Chinese culure
Ke Chen
Chinese national with expertise in cross-
cultural negotiation
Supply knowledge of Chinese regulatory
authorities
Handle relationships and negotiate locally on
Sharpo’s behalf
What’s next?
Extremely successful in marketing the
product
Product design changes twice a year to
remain “fresh”
What’s next?
Celebrations of Sharpo and UK retailer
Further investment on Chinese factory
No visiting nor celebrations with Ke Chen,
Chinese factory and Chinese collaborates
Four years later…
UK market downturn
Overstocking
Hugely opportunistic sales forecasts
Policy changes
Collapse in demand
Situation of Sharpo
No orders from UK retailer
Non-existent relationship with Chinese
collaborators
Considerable investment liabilities
Severed links between Sharpo and Chinse
manufacturer
Sharpo (Internal)
Rigid communication
Functional structure not flexible to market
changes
No sharing of information among
departments
Sharpo (External)
Paid no attention to cultural barrier
Chinese: GuanXi
Overlooked the invitation from Chinese
Did not visit or celebrate with Chinese
factory, collaborator and Ke Chen
Ke Chen (Internal)
No sense of alienation between employee
and central management
Not familiar with Sharpo’s organizational
culture and ritual
No knowledge of cutlery industry
Ke Chen (External)
Cultural barrier: Chinese vs UK
No social relations
1. long-tem relationship
2. relation maintenance to the Chinese
Production Manager
(Internal)
Lack of group synergies / team working
Choosing China
Overstocking due to lack of communication
with sales team
Opportunistic sales forecasts without
Support from past sales figures & statistics
HR Department (Internal)
Physiological barrier
Should delineate with other departments
the criteria for employing a Chinese staff
Should assign a senior to work with Ke
Clive (Internal)
Lack of group synergies/ team working
Decided everything on his own
Mismatch between meeting format and
purpose of the meeting
Failed to share the lesson with his team and
other teams
Clive (External)
Assumed “economic barrier”
- didn’t send representative to negotiate to Chinese
- use of email (no nonverbal communication and personal
interaction)
Psychological barrier: fear of losing UK retailer
- didn’t negotiate with UK retailer
- place himself in an inferior position in negotiation
Cultural barrier:
- use email to avoid conflict
- doesn’t understand Chinese culture
Finance Department
(Internal)
Over-opportunistic sales forecasts
Group think
Physiological barrier
Ignore the symptoms of 2008 recession
Should prepare back-up plan for emergency
Should show the forecast to production
team
Situation of Sharpo
No orders from UK retailer
Non-existent relationship with Chinese
collaborators
Considerable investment liabilities
Severed links between Sharpo and Chinse
manufacturer
Situation of Sharpo
Clive, Sales Director:
Prefer e-mail communication with Chinese
collaborators to avoid conflict
Disagree of sending a representative to
China due to high cost
Divert products to USA market
Situation of Sharpo
To secure alternative sales streams
To salvage relations with Chinese
manufacturer
Sharpo Emergency
Meeting
Sorting out the mess
Sharpo Emergency Meeting
Date: 10 July 2008
Time: Morning
Venue: Executive Boardroom
Meeting holder: Jane, Managing Director
Sharpo Emergency Meeting
Attendees:
Jane, Managing Director
Clive, Sales Director
Human Resource Director
Finance Director
Things to bring
The details of the negotiation with current
retailer (Sales director);
Business profiles of potential retailers (Sales
director);
Invitation letters from Chinese partner (HR
director);
Production reports from Chinese partner
(Production director)
Financial (forecasting) report
Flow of Emergency Meeting
1. Evaluation
Evaluate current business partnership with
the major high street retailer
Flow of Emergency Meeting
2. Alternative sales streams
Discuss the list of potential UK and foreign
retailers
Discuss if it is practical to divert to USA
market
Flow of Emergency Meeting
3. Negotiation strategies
Plan for negotiation strategies with current
retailer and potential partners
Flow of Emergency Meeting
4. Relationship with Chinese manufacturer
Work out solutions to repair relationship
with our Chinese partner
Review on the current production plan
Flow of Emergency Meeting
5. Back-up plan
Design a back-up plan for finding another
manufacturer
Flow of Emergency Meeting
6. Closing of meeting
decide next meeting’s date and time
decide which issues to be discussed next
Example of Ineffective
Meeting
https://www.youtube.com/watch?
v=w8P5gmBUEro
Suggestions for Jane
BEFORE the meeting:
Ask attendees to prepare the materials
needed
Ensure relevant people can attend the
meeting on the decided date
Set up a seating plan
Choose the right communication channel
Suggestions for Jane
DURING the meeting
be objective and listening to others
good time management to ensure all issues are
covered
mark done the issues that did not have time to
discuss, bring them out in suitable time
ensure secretary has recorded decisions
seek consensus
ensure all action points are agreed
Suggestions for Jane
AFTER the meeting:
check the progress of actions needed to be
completed
review minutes
ensure the circulation of minutes
Q&A
