Intercultural Management
How can MNCs effectively negotiate with local employees, local suppliers, and local governments in the Middle East?
Over the last several years, the Middle East has been playing an important part in the global economy. This is based upon vast reserves of oil and natural gas. At the same time, there is a focus on its close proximity to Asia and the West. However, negotiating any kind of business deals can be challenging. This is because of cultural differences which are embraced among many countries around the globe. (Cellich, 2012)
Those who understand the various aspects of them will be able to effectively interact with a variety of stakeholders and create lasting relationships. While those that are not taking these variables into account; will become increasingly frustrated by their inability to effectively communicate with other parties. To avoid these kinds of issues requires understanding the best ways MNC's can negotiate with employees, suppliers and local government throughout the region. This will be accomplished by: carefully examining specific cases, how negotiating can solve certain problems and the roles different cultures will play in the process. Together, these elements will highlight the best approach for addressing the needs of stakeholders and the way they are creating viable strategies for all parties go forward. (Cellich, 2012)
What are some examples of negotiation cases in the Middle East?
This is achieved by having them establish agreements inside select regions for access to different oil fields. For instance, inside the Kurdistan region of Iraq, the government is offering lucrative deals. This is a part of an effort to attract more foreign direct investment and encourage these firms to sell larger reserves on the world markets. What made them so successful, is different companies (most notably: Exxon Mobile, Chevron, Total and Gazrpom) all signed long-term contracts with the regional government. During the negotiating process, they were concentrating on utilizing various cultural aspects in reaching out to officials. These include: avoiding direct confrontations between opponents, establishing respect / trust, controlling emotions, using conferences as mediation and understanding the disregard officials will have towards time. These factors were essential in implementing contracts. That provided these firms with greater access to the oil fields inside Kurdistan. ("The Kurdish Opening," 2012) (Deresky, 2011)
However, Occidental Petroleum failed to win any kind of significant bids in Iraq. This is because they did not focus on honor, respect and dignity in the process. Instead, they demanded that certain conditions must be met in order to ensure they received the contract. The results were that the Iraqi government awarded access to these…
