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The Case
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The Case
While entering a new market, it is vital for any business to consider its all possible strengths and weaknesses. The new markets give new opportunities for realization of goods, expansion of production, further growth, and company development. Following this, the main subject of business activity is the development of new markets and creation of new strategic tasks. It is certainly the fact that successful negotiating requires understanding of such issue as cultural and institutional differences of the countries. The history and social-cultural values influence the business life and the way of running the business or making negotiations. In the given case, there is a situation when the factory was planning to close in France and move to Slovakia. The main reason of such the decision is to save expenditures thanks to resources and cheaper labour. However, there are many issues that supposed to be considered while entering a new market. One of these issues is successful negotiations that will help to set log-term and successful relationships with both parties.
The main negotiating strategy that was chosen by CEO is renegotiation planning. The main keys points of such strategy are defining the issues, knowing ones position, and knowing the position of the others. Moreover, the major approach was a time line that highlighted the net benefits in the long term period. The main issue is that there were many losses supposed to achieve, however, the CEO of the company prevent some negative aspects with a help of successful negotiations and help of local authorities.
Another significant issue that should be considered is the communication with media. The issue is that closure of the factory could become a national new and creating unrest among the employees. The main solution of preventing this situation was to ensure that the atmosphere of trust was established in the project team leading the closure. The major goal of it was to ensure open discussions and forum for free. Consequently, it would create a trustful atmosphere for the first step in setting nondisclosure agreements before negotiations.
According to Labour Office, it was required to have consultation regarding the project before this issue will reach the media. In order to prevent panic, PDG in Europe created release in order to prevent problems with media and unions. The main approach in negotiations in both unions and media required less emotions and more positive points. The CEO, in order to make calm atmosphere and do not spread the panic, had a media training focusing on television questionnaires. In addition, the main goal in communication with the media was to be positive and avoid emotions. The same approach was set in communication with unions. In the negotiating process, it was suggested to avoid using any emotions, anger or aggression. The main point was to set informal and friendly atmosphere. For example, in negotiating with unions, room was left for dialogue. The main pitfalls that could be caused by the unions are that they may have another opinion and influence both the media and especially employees. This issue may result in panic or strikes and consequently, lead to national scandal, that is the reason why it was necessary to set successful negotiations in order to prevent these negative consequences.
The issue of replacement of the factory surrounds the case. In fact, the globalization process is an inevitable part of the development, and it has an extremely huge impact on the modern business. Today, each company can expand their influence across the entire world. Following this, there is the opportunity to sell the products and services to the foreign customers to get more profit. Development of a market entry strategy is based on understanding of business. While choosing a market entry strategy, a company has four alternatives. It can choose one of them separately or a combination of them to reach the goals or to adapt to market conditions. Nonetheless, there may be a negative impact of going global ? cross-cultural communication, where company may face such problems as dissimilarities in languages, mentality, and economic and political system of the country. While making negotiations, it is necessary to remember about own goals and profits, but also consider about the contribution into society. In the given case, the CEO was willing to prove that the company is responsible towards its employees and society, and that profit is not the main goal of the company. Corporate Social Responsibility is a form of corporate regulations that integrated into a business model and the main point of which is to follow ethic norms and rules.
Ethics is an extremely vital part of society, and help society to choose the right way of actions. Business ethics is a set of rules that explain how to conduct business basing on moral values. Ethics in business is a crucial issue as the main goal of business is to get the profit, and many companies conduct it in not ethic way in order to gain profit. Business ethics and corporate social responsibility are vital for fair treatment of people engaged in business, as well as customers. It is certainly the case that reputation is an extremely important for any reasons. First, when the reputation is positive, it causes many benefits to business. In order to get the profit, companies can violate ethic rules and it can result in most dramatic consequences. The main approaches of negotiations were based on ethic norms, fair treatment and care of positive reputation. The CEO of the company made every possible effort in order to save positive reputation. Moreover, informal way of negotiations also created a positive atmosphere and trust of both parties.