The course project is based on a case study: System Modification for Japan. Case study Below
Based on the Background section, address the following topics:
Important hint: You might find it helpful to begin each section of the paper by discussing the key themes and cues you observe. Then, do research on those key themes to both broaden and deepen your evaluation of the case and your understanding of the important issues. In the final product, about half your written evaluation of each topic should be research. About half should be application to the case study.
Recommendation for the level one headings for the body of your paper:
Differing Business Practices
Differing Communication Styles and Structure
Best Practices for Easing Cultural Tension
Case 2.1. System Modification for Japan by Junichi Yoshida (Reprinted by permission of Junichi Yoshida and Infosys) Note: This section was adapted and used by permission of the author and of Infosys. This case study was developed by Junichi Yoshida, a Japanese Infosys engineer, for use in internal Infosys training to illustrate cultural differences in the way business is conducted in Japan and India. The events in the case are compiled and simplified from several different experiences the case writer observed while working for Infosys. The case itself therefore is a fictitious event. Background As the broadband penetration rate in Japan increased, Nippon Tele Communication (NTC) thought that there was a business opportunity for Voice over Internet Protocol (VoIP) service to Japanese consumers. NTC selected the system used by American Tower Corporation (ATC), a U.S. company, for its information technology (IT) system for this application, although it realized that significant modifications and enhancements would be required for the Japanese context. Infosys had worked with ATC to develop this application. Infosys Japan thought that Infosys had a good chance of getting the opportunity to do the system modifications and enhancements for the NTC project. Tanaka-san, a Japanese Infosys sales manager, visited NTC in early November 2003 about bidding on the work but was told by NTC’s head of IT that NTC was in the process of choosing Nippon Information System Processing (NISP) to do the system modifications. Tanaka-san asked why Infosys Japan had not received a request for proposal (RFP) for this Japanese localization work and was told there had not been an RFP. Not ready to give up on this opportunity, Infosys asked ATC to recommend Infosys to NTC. This tactic worked well. ATC recommended Infosys to NTC. NTC then asked Infosys to form a team to make a proposal for the work, offering to pay Infosys for the expenses associated with submitting a proposal. Tanaka-san then requested that Infosys corporate headquarters (which are located in India) send a consultant to help Infosys Japan develop a proposal for NTC. Infosys corporate was reluctant to allocate resources for this project because no contract had been signed with NTC. After a long teleconference between Tanaka-san and Infosys corporate, Infosys corporate decided to send a relatively junior engineer named Sachin. Sachin had an undergraduate degree in electrical engineering from Bangalore University. He was an expert in Java programming, and during the five years he had been at Infosys since graduation, he had been involved in several projects. Recently, Sachin had been the technical architect on the ATC project. The First Meeting at NTC Sachin was not quite ready when Yoneyama-san, an Infosys Japan project manager and engineer, arrived at Sachin’s hotel to take him to the first meeting with NTC. They took the train, meeting Tanaka-san, the Infosys Japan sales manager, in the NTC lobby five minutes before the meeting was to start. Most of the meeting was conducted in Japanese. Sachin was bored, uncomfortable because the room was too hot (he took off his jacket), and tired from the long trip. He was asked only one question—about how many orders the ATC system processed daily. Sachin wasn’t sure but said 10,000. Page 2 of 3 LEA6185_International Negotiations © 2009 South University The Second Meeting After the first meeting, Infosys and NTC engineers met several times, working to develop enough information so that Infosys could estimate the costs of the desired system specifications. Communication at these meetings was challenging. For example, at the second meeting, Sachin had questions to which he needed answers, but he hadn’t written them down. Some discussion was held in English, but for the most part (especially regarding technical issues), Sachin asked each question in English and Yoneyama-san translated the question into Japanese for the NTC engineer. Then the NTC engineer would make a call, get the answer, and pass it on to Yoneyama-san for translation back into English for Sachin. During this second meeting, Sachin believed that the NTC engineer was saying yes, agreeing to most of Sachin’s qualifications and conditions even when Sachin explained that the ATC system only processed 5,000 orders, not 10,000 as he had mistakenly said previously. When Sachin modified his estimate, he also explained that NTC could use faster equipment and be able to process 10,000 orders. At the end of the second meeting, Sachin orally summarized what had been discussed and politely refused to go out for a drink with Yoneyama-san and the NTC engineer, since he did not drink alcohol. More Meetings and Cost Estimate Negotiations After several more meetings and more preparation, Infosys submitted a cost estimate of $220,000. NTC requested a price reduction, since the total cost was almost 50 percent more than NISP’s competing proposal. Infosys objected but ultimately reduced the price by 20 percent. NTC also requested that the time be cut from 16 weeks to 14 weeks. Although doing so would require overlapping the design and coding phases of the project, Infosys agreed to the time reduction. Problems Executing the Project In the course of development, NTC invited end users to test the system and entered the issues these users raised into the tracking system. Sachin thought most of the end-user issues were cosmetic, since they did not block the users from using the system. However, there were far more issues than Sachin had anticipated. Fixing them all would adversely affect the cost of the project or the schedule or both. Sachin told this to his NTC counterpart, trying to make the point that NTC should have frozen the requirements when the contract was agreed to. NTC’s response was that Infosys had been doing what it wanted to do without really knowing what NTC wanted. NTC also said that no delay in delivery was acceptable because NTC was already advertising the new VoIP service. NTC refused to pay extra for the new work associated with solving the end-user issues. Discussion Questions 1. What did you notice about the way the opportunity for this project came about that was an unusual business practice for Infosys? 2. Describe the contract negotiations. In what way were these negotiations a departure from the way you would have expected negotiations to be conducted? 3. Why do you suppose NTC accepted Infosys’s 20 percent reduction, which still made its proposal more expensive than the other vendor’s? 4. Shouldn’t Infosys have asked for something in return for reducing its price? What might Infosys have asked for? 5. Once NTC got a price reduction, it asked for a two-week time reduction. Infosys agreed to that, too. Who was Infosys negotiating with? What should Infosys have done at this stage of the negotiation? Page 3 of 3 LEA6185_International Negotiations © 2009 South University 6. Communication during the meetings to develop specifications was difficult. Is there anything that Infosys could have done to facilitate communication, reduce the transaction costs associated with developing the bid, and minimize conflict once the project was launched? Keep in mind that translation in Japan is expensive. 7. When Sachin tried to make the point that NTC should have frozen the requirements when the contract was agreed to, NTC responded that Infosys did what it wanted to do without really knowing what NTC wanted. What might have led to this response? 8. Should Sachin have gone out for drinks with Yoneyama-san and the NTC engineer? Did Sachin need to drink alcohol?