1.0Abstract It has become clear that in the last 20 years Internationally businesshas evolved greatly and with the advancement of technology the world is a muchsmaller place.
With the increased development in communication andtransportation improving significantly, the world’s economy is growing. Accordingto both Hopmann (1995) and more recently Weiss (2006), this development has hada major impact on culture and negotiation in the world today. It has alloweddifferent nations to do direct business with each other and makes us realisethe importance of the small and medium enterprise (SME) sector. Globalisationand internationalisation has grown increasingly important, and at some point,in time, there will be a need to deal with foreign client or customers.
Oslandet al (2001) stated that, “small and medium size firms that have taken thedecision to internationalise and expand into the foreign markets are faced withthe challenge of choosing the best structural arrangements”, in doing this itcan allow the business to develop and grow, benefiting from the potentialintentional business has to offer. Negotiationis a form of social interaction and a vital part in international business.Carnevale (1992) described it as the process in which two or more parties tryto resolve perceived incompatible goals, this suggesting that any partiesinvolved in a negotiation can face different problems before reaching asuccessful outcome.
Interests are the concerns, needs, fears, desiresunderlying negotiators conflicting positions (fisher et al., 1993). This isdemonstrated when each party have different cultural backgrounds and thereforethe problems can become more complex. When thinking about negotiation, people fromall around the world no matter what their culture, will describe negotiation astwo or more people exchanging a series of offers. However, the west and theEast have created a number of readers to draw comparisons, due to differencesbeing noticeably different in their cultures. Western cultures “tend to viewnegotiating as a competitive process of offers, whereas Eastern cultures viewthe negotiation as an opportunity for information-sharing” (Foster, 1992 p272).
This way of thinking is the reason why negotiation styles differ when Welsh SMEowners negotiate with the Eastern world. 2.0Introduction Withthe world becoming more and more interconnected, companies are seen to belooking internationally to expand their businesses.
This has caused manychallenges in business operations, according to Root (1994) “the global economyhas formed business environments that require companies to look past the traditionalthinking of the home market, instead looking at business from an internationalglobal perspective”. Culture is a key factor when looking at cross culturalnegotiations, therefore it is important for Welsh SME to be aware of culturalinfluences in the negotiation process. Due to the heightened interested, theaim of this study is to understand the influence culture has on theinternational supply chain in the negotiation process, specifically looking atWelsh SME’s. 3.0Research Aim & ObjectivesThe overall research of this study aims to enable the readerto develop an understanding of factors that affect the success of SMEs in negotiationsamongst different cultures, specifically Wales and the Eastern World. The studywill use applicable culture theories which have been utilised to develop andovercome differences in negotiating internationally.
Through the research it is intended to meet the followingobjectives for this study: · Develop and understand cultural theories toobtain and identify different negotiation styles which will need to be adoptedby business people from a Welsh and Eastern cultural background. · Be effective and enable Business owners/peoplefrom Wales to have a good understanding of cultural backgrounds, to help createeffective cross-culture negotiations. 4.0Literature Review There has been a huge turning point in the world economy which is engagedby the phenomenon of globalisation. Since the 21st Century we haveseen growth, the world has developed into a world in which now has nationaleconomies, economies which are merging into an interdependent global economicsystem, this is referred to as globalisation (Saee, 2005). Before this turningpoint, the economics of the world was seen to be isolated, this can be blamedon barriers affecting cross-border trade and investments; with additionalfactors such as distance, time zones, language, regulations and culture differencesall playing a vital role in the process.
Luo et al (2002) suggested that “economicglobalisation will increase the communication of economy and trading dealsamongst countries”, with this negotiation will play a vital role in any internationalbusiness deals. Through research globalisation was first discussed by Levitt (1983), hisconcept indicates that a person who travels encounter different cultures andtherefore with the help of technology people will be encouraged to travel. Ayoko (2007) recognised that every business negotiation is different.Ohanyan (1999); Yook and Albert (1998), suggested that “negotiating can differgreatly across cultures, from contract to relationship”, both these theoriesrelates to Foster (1992) which was mentioned earlier and strengthens the theorythat negotiation is very complex and is influenced by the participants ownnational culture and thinking patterns. It can be very difficult due to thefact that international negotiations involve different values and negotiationstyles, which all need to be considered as important factors in the wholeprocess (Mayrhofer, 2004).
Reducing unemployment and poverty is a worldwide phenomenon, and supportfor businesses in the small and medium sector has contributed to the heightenedknowledge of this area. SMEs are well recognised academically and through policy literature, Birch(1989), Storey (1993) and most recently Abdullah & Beal (2003) are allauthors who have published resources on this topic. Successful SMEs is not onlyan area of interest in Wales but has been analysed by researchers, at leastsince the Bolton report (1971).
However, the SME sector in the nationaleconomic and social development of Wales has been recently recognised throughthe welsh government as one of its main priorities despite the issue of Brexit,”Small businesses are the lifeblood of the Welsh economy, we want to see ourSMEs flourish, creating economic growth” (Hart, 2016). In 2016 a £21 millionfinance package was made available to expand SMEs in wales and more recently, WelshLanguage Minister Alun Davies recently announced that he has committed £400,000to help small and medium enterprises to become more bilingual (gov. wales,2018), therefore if Wales is to be successful in negotiations, then it would bebeneficial to have an understanding of each party’s culture and adopt a negotiationstrategy that is consistent with the other party’s culture (Hollensen,2001). 5.0 Methodology5.
1OntologyOntologies are pattered ways of a single person in the worldthat are lived and experienced. Gruber (1993) defines ontology as “an explicitspecification of a conceptualisation”. Whereas, Chamdrasekaran et al.
(1999)suggests “content theories about the sorts of objects, properties of objects,and relations between objects that are possible in a specified domain ofknowledge”. Subjective ontology is perceived social phenomena that isbased on feelings and experiences that differ but are continually beingaccomplished. Objective ontology portrays the position that social phenomenaand their meaning have an existence that is independent and easy to prove. For this research, Subjective ontology will be used. 5.2EpistemologyEpistemology is the science devoted to the discovery of theproper methods of acquiring and validating knowledge. Subjective epistemology is characterised primarily byperceiving mind.
Objective epistemology is characterised primarily byphysical extension in space and time. For the research, subjective epistemology will be used, asnegotiations in business differ due to a number of factors, using subjectiveepistemology will allow for interpretation to be integrated with the experienceof participant, thereby transforming knowledge acquired into something that canbe used on behalf of oneself or working community. 5.3Philosophical PositionThrough this study an Interpretive research method will beused, this element seeks to understand the multiple social constructions ofmeaning with a particular context (Richie & Lewis, 2003). Through this itpresents a philosophical approach that is based on the belief that is importantto understand the world of lived reality and situation-specific meanings(Stewart and Shamdasani, 1994).
However, Cohen, Manion and Morrison, 2000suggested that interpretivist rejects the view that behaviour is consistent andcan be socially identified and tested accordingly. 5.4Inductive ApproachHussey & Hussey (1997) defined inductive approach as atheory in which development is made through observation of empirical reality.Using this approach through the study will allow the researcher to gain arealisation and understanding of the meaning participants attach to events,benefiting the collection of qualitative data. This research will use Qualitative data in order to capturesubjective data, this will allow answers to be captured relating to theobjectives discussed earlier. When starting research methodology, it isimportant to recognise which type of data you will be using therefore “having agood understanding of qualitative and quantitative research methods” accordingto Dawson (2009). Using different approaches when researching data allows theresearcher to capture different types of empirical data, these methods are notseen to be good or bad, but rather more or less suited to the task in hand(Veal, 2005). Dawson (2009) suggests that “qualitative research exploressubjective issues, behaviours and experiences through employment methods suchas interviews or focus groups”, whereas quantitative research generatesstatistics through the use of large-scales observations such as questionnairesor structured interviews (Creswell, 2009).
Veal (2005) indicates this bycomparing “the term qualitative as a technique that is used to generate qualitative,rather than quantitative information”. In order to meet the objectivesdiscussed and have a subjective understanding, the underlying philosophies ofqualitative research methods will be used to allow attitudes, behaviour andexperiences to be explored. The focus groups will be small however, this willallow for more time to be spent with each person and therefore applying thisstrategy will allow an in-depth data analysis on the views each person has ofcross-culture styles in business. 6.0Limitations6.1SamplingThe research will have a time constraint of six months. Dueto this constraint, the researcher will focus on a small judgement sampleconsisting of 5 -10 people from Welsh SMEs. The respondents will be businessowners or of management level with experience in supply chain negotiationsincluding signing contracts, selling and buying products.
The types of businesses that were used wereSMEs in the manufacturing sector. There will be a maximum of 10 questions usedfor the in-depth interview in order to meet the factors identified by Salacusetheory, for this reason and due to time scale, the respondents will need to begiven plenty of notice when scheduling time and dates to conduct theinterviews. This may cause limitations in the research process due tocancellations and lack of time. 6.
2Ethical IssuesWhen conducting qualitative research ethical issues arefaint compared to quantitative research. Qualitative research has a focus onexamining people in their own environments, therefore potential ethical issuesmay arise when a researcher needs to have access to a working environment, thiscreating an uncomfortable effect on participants. In order to address ethical issues participants will be madeaware in advance of the research purpose. All information will be keptconfidential and correspond to Bell (1999) theory that names, identities,personal information of participants will not be disclosed to comply withethical reasons.
This is also an important factor when earning peoples trustand obtaining good data rather than bad data, which can be developed when trustis not gained. FindingsThis research set out to find answers to what are thecultural differences that affect business negotiation for Welsh SMEs trading internationally?The in-depth knowledge gained when conducting interviews,initiated by probing, allowed to gain an understanding about the participantscultural background and experiences. From using a qualitative dialogue framework data obtainedfrom answer given by participants give a clear understanding of how they valuedtheir negotiating skills and behaviours when dealing internationally. However,as it a reflection on how they saw themselves then a true reflection may nothave been determined and is not a true reflection on how culture affectsinternational negotiations. Furthermore, the findings indicated that the data presentedgave an indication that negotiation can be determined by culture as well as anumber of other influencing factors such as age, gender, sex and the nature ofthe transaction being discussed. ConclusionThrough this study it has concluded that understanding thesuccess of a small medium enterprise is a complex challenge.
As suggested bySimpson et al. (2012), a business success is a matter of opinion, which can beinfluenced by internal and external factors being met or exceeded, and somemaybe critical to the success. Within the literature review an analysis of differentcultural theories was used to directly link candidates own influences onbusiness negotiations styles in Welsh SMEs and how their cultural understandingaffected this.
Using Salacuses cultural theory was the most relevant theory forthe research to be carried out, it allowed the researcher to focus primarilythe impact culture had on business negotiation styles. Research Methodology was next discussed. The research wasdetermined to be a subjective report, using ontology and epistemology elements ofphilosophy.
The philosophical approach used was interpretivist factoring in aninductive approach. It was decided that the data collection element of theresearch would include qualitative research which enabled the researcher toconduct in-depth interviews as the most effective way of a data collectionmethod. From the data collected and using Salacuse theory, the findingindicate that it can be easily used to identify which negotiating style willwork best for Welsh SMEs, highlighting any possible traits. This informationshould then be used to develop and assist in successful negotiations betweenWelsh SMEs and the Western World. Furthermore, through the research it has been identifiedthat globalisation and negotiations throughout the world are deep rootedvalues, but are changing over time as the world develops in the process ofinternational trading.