International Business Negotiations : A case study of Philips

Abstract: Negotiations are a frequent part of international business. Parties involved in a negotiation face different problems in reaching a successful outcome. When the parties have different cultural backgrounds the faced problems become more complex. The study provides for an understanding of the negotiation and influencing factors in head office subsidiary relationship. The relationship is complex since the head office and the regional subsidiaries have different cultural backgrounds. One case study is performed between a global Dutch company and two of their local subsidiaries in Japan and Korea. A framework for the analysis is developed and the factors that influence the negotiation are identified. The data were compiled from interviews from the Dutch side. The study reveals that the negotiation between the head office and their subsidiaries is complex. Culture is not the only barrier but the cultural awareness becomes critical. Other major influences between the head office and the subsidiaries are the organisation itself, status of the atmosphere and the relationship.