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Mc Donalds entering and expansion into Kazakhstan issues that may occur with Negotiation and conflict resolution in the future and how it might be overcome? Essay Example

  • Category:
    Management
  • Document type:
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  • Level:
    Undergraduate
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0Negotiation And Conflict Resolution

NEGOTIATION AND CONFLICT RESOLUTION WHEN EXPANDING TO KAZAKHSTAN

A conflict comes into being when two parties interact, one of the parties experience damage and one of these parties ignores the negative effects on the other party (Sughrue, 2009).

People tend to believe that all humans are the same no matter the culture they come from. They tend to think that deep down we are all alike. This is not the case and conflicts may arise as a result of bad business decision which may be made since manager’s act in the same way as they would have in their domestic culture. As McDonald’s intends to enter in Kazakhstan market mid this year, they need to negotiate on the rules to apply when it comes to the cultural dynamics in Kazakhstan. The conflicts would arise due to, different values, different languages and different attitudes. To solve this, communication is of essence. A business relationship can be damaged when there are misunderstanding based on cultural differences.

According to Stone (2011), Kazakhstan adopted a separate law concerning transfer of pricing, which involved the arms-length concept form 2009. Mc Donald has been operating in other countries like Russia where the laws governing transfer of pricing are different. Any issues may arise as McDonald tries to expand to Kazakhstan, in this case concerning transfer pricing. To resolve this, McDonald has to comply with the stipulated laws set by the host country (Kazakhstan).

Another issue which may arise is the issue of marketing. In France, the demand for beer and wine forced McDonald’s to offer these products in premises. Retail concepts are supposed to be tailored for the region an organization enters into. In the case the conflict resolution would be to have a cost/benefit analysis and environmental analysis which would involve all the internal and external determinants to create knowledge about both the current and future projections. In this case there will be no conflict since, McDonald will identify a tactical approach to approach the market[ CITATION Hel01 l 1033 ].

Another issue which may bring conflicts are legalities concerning the conduct of business in Kazakhstan. Custom laws, tax laws, import restrictions and agency laws may be a stumbling block. To solve this, it is advisable for McDonald to have a legal advisor before forming a partnership. The Kazakhstan legal system enforces serious penalties when it comes to administrative violations even when discovered later, years after establishment[ CITATION Chu07 l 1033 ].

An environmental concern may also come up in the negotiation as McDonald tries to expand its territories in Kazakhstan. Companies may pollute the environment in the case of production. This may bring up a conflict which may cause a disruptive environment in the business. As McDonald’s was ejected out of business in Russian due to unhealthy claims in its operations , it might bring controversies when established hence permit letters should be collected as a prove to the Kazakhstan government.Every real market can be a potential for conflicts. Therefore, by complementing market-based instruments and the use of conflict analysis when assessing new markets might add new dimension to conflict resolution[ CITATION Sim01 l 1033 ].

References

Chursov, A. (2007). Tricks of trade in kazakhstan.

Helba, F. (2001). Future global marketing negotiations. Future of promoting leaders ,USA , 110.

Mason, S. A. (2001). Analyzing Economic MarketInteractions as Conflicts:. Zurich : University

of Zurich press.

Stone, G. (2011). International transfer pricing 2011.Price water house coopers. Newyork: price

water house coopers.

Sughrue, N., 2009. Conflict management and negotiation strategies , Pakistan: Pildat.