Recommendations to improve negotiation and signing contract procedure to export quick lime in an my duc trading joint stock company

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: NGUYỄN VĂN MINH DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO IMPROVE NEGOTIATION AND SIGNING CONTRACT PROCEDURE TO EXPORT QUICK LIME IN AN MY DUC TRADING JOINT STOCK COMPANY HAI PHONG – 2015 MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: NGUYỄN VĂN MINH CLASS: GMA 02 DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO IMPROVE NEGOTIATION AND SIGNING CONTRACT PROCEDURE TO EXPORT QUICK LIME IN AN MY DUC TRADING JOINT STOCK COMPANY Supervisor: VŨ THANH TRUNG Division: BASIC ECONOMICS Faculty: ECONOMICS HAI PHONG – 2015 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company PREFACE I declare that this report is my own unaided work It has not been submitted before If violated, I am solely responsible for and bear the punishments of the Institution and University Student Name and Signature i NguyễnVăn Minh- GMA02 Page i Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company ACKNOWLEGEMENT Firstly, I would like to express my sincere gratitude to my advisor Vu ThanhTrung for the continuous support of my study and related research, for his patience, motivation, and immense knowledge His guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my study i NguyễnVăn Minh- GMA02 Page ii Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company TABLE OF CONTENTS PREFACE i ACKNOWLEGEMENT ii TABLE OF CONTENTS iii LIST OF TABLES v LIST OF FIGURES vi INTRODUCTION CHAPTER 1: LITERATURE REVIEW 1.1 Fundamental issues on negotiation and signing contract in international trade 1.1.1 The concept of negotiation: 1.1.2 Characteristics of negotiations in international trade: 1.1.3 Forms of negotiation: 1.1.4 The negotiation strategy in international trade 1.2 The process of negotiating sale contracts in international trade 1.2.1 Planning negotiation 1.2.2 Preparation phase 1.2.3 Conduct negotiation phase 1.2.4 Check, evaluate and study experience 10 1.4 Principle of signing sale contract: 10 1.4.1 The major contents of sale contract 11 1.4.2 Method of signing foreign trade contract 12 CHAPTER 2: 13 RESARCH AND ANALYSIS ON ACTUAL SITUATION IN NEGOTIATION AND SIGNING CONTRACT PROCEDURE TO EXPORT QUICKLIME IN AN MY DUC TRADING JOINT STOCK COMPANY 13 2.1 2.1.1 Methods of collecting data 13 2.1.2 Methods of data analysis 14 2.2 i Research Methods 13 Overview of An My Duc Trading Joint Stock company 14 2.2.1 Summary of An My Duc Trading Joint Stock company 14 2.2.2 Functions and duties of the company: 14 NguyễnVăn Minh- GMA02 Page iii Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company 2.2.3 The organizational structure of the company: 15 2.2.4 Results of business activities 18 2.3 Evaluate situation and effects of environmental factors to negotiation and signing contract procedure to export quicklime in An My Duc Trading Joint Stock Company 20 2.3.1 Negotiating Background 20 2.3.2 The effect of environmental factors 21 2.4 The results of the investigation in negotiation and signing contract procedure to export quicklime in An My Duc Trading Joint Stock Company 23 2.4.1 Planning negotiations 25 2.4.2 Preparation of negotiations 26 2.4.3 Conducting negotiations 29 2.4.4 Conclude negotiation 31 2.4.5 Check, evaluate and study experience 31 2.5 The Results of signing contract 31 CHAPTER 3: 35 EVALUATION AND RECOMMENDATIONS FOR NEGOTIATION AND SIGINING CONTRACT PROCEDURE IN AN MY DUC TRADING JOINT STOCK COMPANY 35 3.1 The conclusions and findings through studies in the process of negotiation, signing contract in An My Duc Trading Joint Stock Company 35 3.1.1 Achievement 35 3.1.2 Limitations 36 3.1.3 The reason of the limitations 36 3.2 Recommendation to improve the negotiation and signing contract procedure of An My Duc Trading Joint Stock Company 37 3.2.1 Improvement of planning negotiation 37 3.2.2 Find necessary information of partners and market 38 3.2.3 Preparation negotiating techniques 38 3.2.4 Evaluating the results after concluded negotiation 39 3.2.5 Improve the level of the negotiating team 40 3.2.6 Improve check, evaluate and study experience phase 41 CONCLUSION 42 REFERENCES 43 APPENDICES 43 i NguyễnVăn Minh- GMA02 Page iv Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company LIST OF TABLES Table 1: Statistics of employment levels in 2014 22 Table 2: Summary of survey test 24 Table 3: Table evaluate the results negotiation 39 i NguyễnVăn Minh- GMA02 Page v Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company LIST OF FIGURES Figure 1: Organization of company 16 Figure 2: Business capital of company 18 Figure 3: Revenue of company 18 Figure 4: Export Output 19 Figure 5: Ratio between revenues, total expenses and gross profit 20 Figure 6: Model evaluation negotiating process 41 i NguyễnVăn Minh- GMA02 Page vi Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company INTRODUCTION Necessary In the context of the Vietnam economy shift to integration into world economy, specially, after Vietnam officially becomes a member of the World Trade Organization, International Trade of Vietnam also growing and significant contribution to the total gross domestic product and the development of Vietnam's economy.One of major export items of Vietnam is material exporting to high demand market where that countries’ industry is growing and development However, the export enterprises of Vietnam currently are mostly businesses with small and medium sized companies such as An My Duc Trading Joint Stock Company.In trading with overseas partners, Vietnam's exports companies are often more vulnerable and facing many risks when negotiate and sign contracts Negotiating in order to bring a successful contract, mutual benefit for both sides is a not a simple job, especially in the situation of Vietnam exporters are mostly small and medium enterprises with management skills and negotiating skills in international business are limited With the case of An My Duc Trading Joint Stock Company, in the development, the negotiation operation to sign a contract has gradually improved, but the company still faces to many difficulties such as preparing information, market research, preparing negotiation, etc Therefore, it needs to improve the negotiation and signing contract procedure to help companies develop strongly in the future Research Object Based on the knowledge, real experience as well as research on the negotiation and signing contract procedure in An My Duc Trading Joint Stock Company I will submit some recommendation to overcome limitations and improve the negotiation and signing contract procedure among company Research Scope i - Research subjects: negotiation and signing contract procedure to export - quicklime at An My Duc Trading Joint Stock Company Research scope: An My Duc Trading Joint Stock Company Research method: survey, direct interview and collecting secondary data NguyễnVăn Minh- GMA02 Page Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company Research Findings From collected data, I will find out some limitations in the negotiation and signing contract From which I have assessed the status of the negotiation and signing contract and give recommendations for An My Duc trading Joint Stock Company Due to limited research time, so dissertation also has many limitations; I am looking forward to the sympathy of teacher Thank you sincerely! i NguyễnVăn Minh- GMA02 Page Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company - Revision process: missing steps, effective steps and supplementing for each steps - Review the company has met how requirements of the partner, gains from the advantage in stages, and how concession influence trading results - Overall assessment of successes and limitations to gain experience for the next negotiations The study learned after the conclusion of the negotiations will help companies avoid these problems and flaws in the next negotiations 3.2.5 Improve the level of the negotiating team Currently, the company has 19 people, including managers, deputy general managers of all operations, and 15 of employees engaged in international trade operations, employees work relating to customs operations, employees in charge of activities related to the bank, employees in other activities Nevertheless, only the deputy manager has extensive experience in international negotiations and always engages in negotiation, along with the director and negotiating team Therefore, negotiating staffs need to have more people with higher qualifications, must understand the business The company needs to have plans, training employee programs to improve negotiating business It needs to establish a negotiating team specialized in each market Also, companies need to focus on improving language skills, IT of staff Employees involved in international trade activities need to be proficient in English and computers In addition employees should also add some other language-related markets where companies exported commodity Taiwan market is very large concentration of culture, society, different policies and legislation Therefore, understanding the law is a necessity in the long term business relationship Besides, companies need to have the consultants of legal experts in the process of negotiating to get a legitimate contract, avoid disputes and litigation affects the relationship between the two parties In the long term, to ensure human resources for negotiations with high capabilities and expertise, the company needs to improve recruitment requirements in order to have high quality employees Besides, it needs looking to recruit more staff in charge of the legal field, establishing the legal department in charge of legal matters for the entire company i NguyễnVăn Minh- GMA02 Page 40 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company 3.2.6 Improve check, evaluate and study experience phase Finally, after the negotiations the company should seriously carry out checks, evaluate and study from experience A summary of negotiation will be analysis on the basis of analysis table below: Moreover, An My Duc Trading Joint Stock Company can use the following criteria to evaluate the performance of negotiations: Determining the evaluating content Determining evaluating indicators system Identify key indicators system Analysis of the advantages Analysis of limitations Determining the value of the indicator Comparison and analysis to find the cause of issues Drawing experience for the next negotiations Figure 6: Model evaluation negotiating process Besides, it need to pay attention to partners such as opening way, noting on preparation, negotiation time, the characteristics of each member of negotiating partner team, etc The above content must be formed on the text stored in print or digital data The experiences, study will determine and provide information for the company in the next negotiations with partners This information will provide quickly and saves prepare time for prepare the necessary information in negotiations i NguyễnVăn Minh- GMA02 Page 41 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company CONCLUSION In the context of Vietnam's economy is in crisis and inflation, using reasonable methods of negotiation and contracting will help companies improve sales number Despite with position as the a small business, but with excellent skills and experience in negotiating and signing contracts, An My Duc Trading Joint Stock Company has successfully conclude signing contracts with many partners in different markets, has established special trading relationships with partners in some major markets From studying about the process of negotiating and negotiating strategy of An My Duc, this dissertation have put some points to note in negotiations and sign contracts in international business On the other hand, this research will improve the effect of international negotiations for the exporters in Vietnam The negotiation process can be divided into two phases: preparation of negotiations and conducting negotiation Both phases are important and significant impact on the results of negotiations The preparation of information and personnel in negotiations decide the successful of negotiation In order to improve the capacity of negotiation skills, companies should constantly study about the culture of the country and important information It sometimes determines the outcome of negotiations The Vietnam exporters expanding business market, companies need to upgrade their skills for negotiating and signing contract in order to not weaken in international business and enhance its position in the international arena Negotiating and signing contracting success is an important step in the strategy of exporting products, enhance exports value and contribute to the economic growth of countries, especially Vietnam is in the context of increasingly deep integration into the world economy today i NguyễnVăn Minh- GMA02 Page 42 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company REFERENCES Bon, A p (2008) Lecture on negotiating skills in international trade KHUÊ, L M (2015) CÔNG TY LUẬT MINH KHUÊ Retrieved from https://luatminhkhue.vn: https://luatminhkhue.vn/kien-thuc-luat-dan-su/kynang-dam-phan-ky-ket-hop-dong.aspx Mai, B T (2003) Explore about the problem using model contracts in negotiation and conclusion of foreign trade contracts and practices in Vietnam Ngoc, P T (2007) Art of negotiating in foreign trade contracts with Japanese firms K37 FTU Nhung, T T (2010) Thesis: Negotiation and signing in international business contracts Quantri.vn (n.d.) Retrieved from http://quantri.vn/dict/details/171-rui-ro-trongdam-phan-hop-dong-ngoai-thuong Tuu, D V (2007 ) Introductory course: Professional technical in foreign tradeEducational Publishers Van, A P (2005) Foreign trade techniques Statistical publisher APPENDICES Appendix 1: QUESTIONNAIRE i NguyễnVăn Minh- GMA02 Page 43 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company VIETNAM MARITIME UNIVERSITY INTERNATIONAL SCHOOL OF EDUCATION SOCIAL REPUBLIC OF VIETNAM Independence-Freedom-Happiness -* - QUESTIONNAIRE Servicing for the dissertation Topic: "Recommendation to improve negotiation and signing contract procedure to export quicklime of An My Duc Trading Joint Stock Company" Student: NGUYEN VAN MINH Class: GMA02 Dear: (Mr and Ms )………………………………………………… Vietnam Maritime Company would like to thank your company has received final-year students of school to internship at your company and create all favorable conditions for students successfully to completed synthesis information of your company On the basis of information collected and processed through the phase synthesis practice, students have chosen research topic for thesis To make the process of research by students meet the actual requirements of your company, kindly request Mr (Mrs.) indicate the following information: PART A PERSONAL INFORMATION Name Mr (Ms.):…………………………………………………… Position: i NguyễnVăn Minh- GMA02 Page 44 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company PART B: Mr (Ms) please indicate assesses negotiation and signing procedure of your company: The below question will ask you about quality of implementation in negotiating process 5-level scale equivalent from to will be used to assesslevel of performance: Excellent = points, Good = points, Fair = points, points = Average, Poor = point Statement Very good Goods Fair Avera ge Poor Planning negotiation Preparing negotiating information Preparing negotiating content Preparing personnel Preparing negotiating location Preparing work program Approach Phase Information exchange Persuade Phase Concessions and agreement phase 5 Preparation of negotiation Conducting negotiations Conclude negotiation Check, evaluate and study experience i NguyễnVăn Minh- GMA02 Page 45 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company Part C: Here, you will answer following question relating to negotiating procedure of company: Company often collects what kind of information to support for negotiation: - Information of commodity - Information of markets - Information about partner - Other information What is the highest requirement for collecting information activities? - Accurate information Up to date information Timely information What negotiating strategy does the company often use in negotiation? Hard negotiation strategy Soft negotiation strategy Principled negotiation strategy Companies often held negotiations at: - Domestic - Abroad - Other locations The content of the company's negotiating sale contracts are: - Export prices - Payment - Delivery - Other contents The preparation of personnel negotiations: Having / negotiating team In particular, the components negotiating team includes: - i Legal expert Technical experts Commercial experts Interpreter Other components:……………… NguyễnVăn Minh- GMA02 Page 46 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company The source of information that company often collects necessary information: - From the specialized international organizations - From specialized magazines, Internet - From the Ministry of Industry and Trade, VCCI - From internal company’s storage - From the information service center - Other sources:……………………………………………… At the end of negotiations, company is evaluating the results of the negotiations: - Yes - No If so, companies often assessed in a methods: - Model of evaluation negotiating performance - Assessment table points - Different ways:………………………………… i NguyễnVăn Minh- GMA02 Page 47 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company Appendix 3:List of interviewees No Name Position ĐỗVăn Minh Vice Director NguyễnGiangAnh Business Manager LêTuầnPhong Business Department Staff HồĐứcThuận Business Department Staff NguyễnThịNguyệt Business Department Staff i NguyễnVăn Minh- GMA02 Page 48 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company Appendix 4: the results from survey test Table: Descriptive Statistics N Planning negotiation Preparing negotiating information 8 Max 4 Preparing negotiating content 4,13 ,641 Preparing personnel 3,00 ,535 Preparing negotiating location 3,50 ,535 Preparing work program 3,87 ,641 Approach Phase 4,13 ,641 Information exchange 3,38 ,518 Persuade Phase 3,50 ,756 Concessions and agreement phase 3,38 ,744 Conclude negotiation 3,00 ,535 Check, evaluate and study experience 2,63 ,518 Valid N (listwise) i NguyễnVăn Minh- GMA02 Min Std Mean Deviation 2,88 ,641 3,25 ,463 Page 49 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company Appendix 4: CONTRACT i NguyễnVăn Minh- GMA02 Page 50 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company i NguyễnVăn Minh- GMA02 Page 51 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company i NguyễnVăn Minh- GMA02 Page 52 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company i NguyễnVăn Minh- GMA02 Page 53 Recommendations to improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company i NguyễnVăn Minh- GMA02 Page 54 ... SIGINING CONTRACT PROCEDURE IN AN MY DUC TRADING JOINT STOCK COMPANY 3.1 The conclusions and findings through studies inthe process of negotiation, signing contract in An My Duc Trading Joint Stock. .. improve negotiation and signing contract procedure to export quick lime in An My Duc Trading Joint Stock Company 2.4.1 Planning negotiations Understanding the importance of the planning negotiation, ... internships at An My Duc Trading Joint stock Company Here are some recommendations to improve the negotiating and signing contracts procedure of An My Duc Trading Joint Stock Company 3.2.1 Improvement