Huge and Co. case
...e concessions in order not to go home empty-handed. Korean negotiators are criticised for lacking creativity. This once again comes down to the rigid power distance in the hierarchical system where they are reiterating the words of senior management. To question the judgment of a superior is simply not an option so that is why Koreans always follow the management imposed solution. The hierarchical structure of an organisation is based on seniority and the one sure way that a Korean will advance in the company is shutting his mouth and following orders. Another important point that has to be drawn upon is that Korea is a high-risk adversive culture and creativity is seen as a risk and therefore generally is something to be avoided. That is why at the negotiation table the Koreans won’t make too many concessions and alter the deal substantially. That is generally left in the hands of the westerners and senior management. Korean negotiators are viewed as aggressive and narrow-minded. As previously mentioned this stems from the fact that the Koreans are simply relaying senior management’s goals and objectives. They are also trying to impress their superiors for promotional purposes. Another social behavioural trait stands out here also and that is Koreans are very competitive and that can be reflected back to their highly competitive cutthroat educational environment. Koreans are known to seek further concessions after the deal has been done. This is partially due to satisfying senior management requirements of acquiring added bonuses. However it is also cultural. Westerners place a high level of importance on the written contract and Koreans place a lot of importance on the sense of the agreement. Since a contract represents an agreement at a certain point in time, as time changes so the contract must change to accommodate this. The Koreans view the contract as the starting point for the development of the relationship. So foreign negotiators have to be aware of this and make sure they don’t give away all their concessions before a contract is signed because this can place them in a very weak position. Language can still be a barrier even though Koreans intensively study English. Speaking and listening skill as it is with studying a new language are generally lower than reading ability. So it is always useful to have a translator on hand! After knowing all above mentioned issues time to get the deal! Best way to reach satisfactory agreement for both sides is to find synergies which both sides (or even three sides) may benefit from. In this particular case it may be: • Of course main goal of that transaction is to get know-how of Mobile and made it as exclusive software solution for Huge. In terms of profit large benefit would go to Huge & Co. In terms of long term development Mobile would get guarantee of financial stability and possibility to develop their production optimizing software. Sooner or later Mobile as regarded as “must have” program producers will be taken over by another mobile market player. • To secure both sides would be useful to make part of the contract between Huge and Mobile point including that part of transaction would be part of extra profit reached by using software produced by Mobile. This could be i.e. 5-10% from extra earning measured after program implementation. • So far Mobile Inc. had no business in Europe, where Huge & Co originally comes from => expansion possibility for Mobile Inc. • Both companies have their facilities in Korea => in long term cost reduction by placing both facilities at one site. • Huge & Co. as industry leader in mobile devices may include into their portfolio phone handset covers produced by Big and Co., which owns (100%) Mobile Inc. • Huge & Co. may available their distribution chain for Big and Co. products as first one is present in more than 80 countries with its sales and distribution networks; could be provided as service at special a bit lower than market rate. Most interesting could be knowledge of European market that Huge has and Big is not present in that region except Germany. As there are no...