Please answer questions from the text Outline the what your resistant point is and what, on the facts given, you conside
Posted: Tue Jul 05, 2022 11:27 am
Please answer questions from the text
Outline the what your resistant point is and what, on the factsgiven, you consider the ZOPA of the negotiation to be.
What steps / strategies to you plan to use to achieve your goal.Remember this is what you are expected to follow in the actualnegotiation.
Taking Hofstede’s cultural dimensions into account outline thekey cultural aspects you think you need to consider in thisnegotiation. What adjustments
can you make to deal with these cultural aspects?
How might unethical behavior affect a negotiation?
Confidential Instructions for Tokyo Saki Role
Bacchus is a successful winery, with 63 fully ownedvineyards scattered throughout the US (although the majority arelocated in California). Bacchus was founded some 20 years ago, andappears to be a successful and growing company, as they havemaintained a strong market share, specializing predominantly inhigh-end wines, although they also produce some moderately pricedwines. Bacchus consistently wins prizes for their wines, bothnationally and internationally, with their wines holding up well toFrench wines in Western Europe, at least outside of Franceitself.
Tokyo Saki produces sake and rice wines, various Asianbeers, as well as a line of alcoholic ginseng products (previouslyacquired from a Korean company). Tokyo Saki has strong market sharewithin Asia, and has been making inroads as a novelty product,especially with its ginseng lines, in Europe and North America. Atleast part of the success of the ginseng lines has been due to thecommon belief that the ginseng root prevents the negative effectsof alcohol on the system (such as liver damage due toover-consumption) and has long been recognized for its medicinaland curative powers in Asia, and more recently in Europe and NorthAmerica.
Serbian Steins & Stems specializes in fine decanters,wine glasses, and accessories. More importantly, however, theyrecently patented a new process that makes fine, delicate crystaland porcelain virtually indestructible, while maintaining itsbeauty and fragile appearance. This development has obviouscustomer appeal, but also significantly reduces the expensesassociated with shipping breakage and the like. If costs can bereduced on the process, it may even be feasible to use thetechnique for bottling, making it attractive as a virtuallyunbreakable bottle for wine and beer, as well as other products.Tokyo Saki recently acquired a small stake in Serbian Steins &Stems, hoping to complement its offerings with the accessories thatwould appeal to the North American and European markets, thusbringing it into the merger talks in a three-way play.
Last year, Bacchus management made overtures to Tokyo Saki in aneffort to acquire their full line. Tokyo Saki declined, butencouraged a discussion of a possible merger between the companies,including the possibility of Serbian Steins & Stems forcontemplation. Such a three way merger might provide Bacchus withcomplementary products and a presence in high-potential markets,while providing Tokyo Saki and Serbian Steins & Stems withproduct visibility and distribution systems that include thelucrative U.S. market. With the increasing popularity of fine winesand accessories, as well as “New Age” herbal medicines, such athree-way merger provides a particularly attractive opportunity.However, there are risks. For example, whether or notBacchus has topped out in its market expansion isn’t clear.And the instability of the political situation in EasternEurope is cause for concern as well, in any deal involving SerbianSteins & Stems. Given the risks and possible benefits, Bacchushas expressed cautious interest in the possibility of a three-waymerger, and these discussions led to a satisfactory agreement onprice, however, there are several issues that are yet to beresolved. These unresolved issues have led to the present meetingbetween your executive groups. In preparation for the meeting, thethree companies have already exchanged appropriate information andfigures. Unfortunately, a merger between any two of the companiesloses significant synergy and is considerably less attractive;hence it is important to negotiate an agreement that issatisfactory to all parties, if there is to be an agreement at all.At this time, the remaining issues to be resolved include:
Stock ownership of the combined company that wouldresult from a merger. The division of stock influences the amountof the annual profits that would accrue to each of the threerespective companies. This issue is, of course, of very highimportance to you. You believe that the division of stock ownershipshould be driven by the fact that you are bringing a totally newproduct line to the table, and that you have a much greater profitmargin than anyone else does at the table. However, you are alsoaware of the fact that Bacchus has a considerably higher value, andthat Serbian Steins & Stems brings something unique to thetable. You believe that these differences entitle you toa minimum of 25% ownership of the combined company.
Control, as represented by the number of voting seats onthe 12-person executive board to be controlled by each company. Itis extremely important to you that you have multiple membersrepresented – enough to wield some level ofpower – on the executive board. This issue is apoint of pride, as you explicitly do not want to be “takenover” by Bacchus — you desire a merger that is respectful ofyour identity and accomplishments. You worry that minimalrepresentation could easily be intimidated and silenced onthe board and would become “tokens” with little or noactual influence. You bring a unique productline – especially with the ginseng products, one that ishighly saleable in multiple markets. This will invigorateBacchus’ currently rather stale lines. In addition, given yoursmall ownership in Serbian Steins & Stems, you are clearlybringing a great deal to the table and your contributionsshould not be minimized.
Management. There are three managementissues. First, is the management of the company in eachcountry? In order to capitalize on the strategic synergies,management issues are key, and it will be critical to staff eachlocation appropriately. It has not yet been established whethereach location would continue to run as they have been running, orwhether the Americans will try to select and send general managers,or whether there will be some form of exchange program orcross-training of managers. However, it is extremely important thatyou have at least one Japanese manager in each location,otherwise you will be unable to appropriately monitor othercomponents of your business and react quickly andappropriately to decisions that are not in Tokyo Saki’s bestinterests. Your preference, of course, is to staff withJapanese mangers, but you realize that is not realistic. Yet, youalso understand the importance of working within a socio-culturalnetwork, and know that the locals have contact that your managersmight lack. Hence, in lieu of Japanese representation, you willaccept local management. The second issue is moretroubling. That is what to do about Nikko Raspovliac, the son ofthe founder of Serbian Steins & Stems. It is your understandingthat he is an unrepentant womaniser, and there are even rumors thathe may be involved with the drug trade. Unfortunately, you learnedof all this after you originally purchased a stakein their business. Raspolivac’s negative reputation willresult in significant loss of face for your company in any publicliaison (and you have debated ending the existing one if you canfind a way out!). It is simply not acceptable to have someone atthe helm whose reputation is so sullied. Finally,the third issue is management incentives, or how tomotivate the management teams towards the common goals of themerged companies. You have always paid your managers an attractivesalary, yet Bacchus has suggested that they be
paid contingent on performance. Although you are willing toprovide a small contingent incentive, you know there are clearlydifferences in the different foci of the companies and that someare simply easier to make a profit at, and any manageraccepting a “difficult” assignment would be penalized. Inaddition, you know that such differences will create status andpower differences among the managers of the different divisions,which is simply unacceptable You strongly prefer no contingentincentives, as you want to continue the culture you have developedat Tokyo Saki, a culture that has served you very well indeed. If acompetitive culture were instantiated, your past experience in Asiasuggests that they refuse to help one another, or lobby forspecific interests, which clearly could be to your detriment. Inaddition you know well that such a plan will substantially reducethe morale among the management team and create conflict andtension.
Form of the agreement is also quite important. Inyour previous negotiations with Bacchus, it seemed as if they werecompletely unwilling to build any flexibility into the agreement.Yet, in merging the three companies, you are charting newterritory, and having some flexibility – to accommodatethe unexpected as it arises – is not only essential, butmakes good business sense. Thus, it is important to you that anyagreement struck be flexible, with adequate safeguards foraccommodating the unexpected. In addition, you find Bacchus’insistence on penalties for minor accommodations in thecontract to be repugnant and insulting, and will clearly damage therelationship among all parties. Your preference is for a contractthat avoids threatening trust by specifying penalties that maynever be needed.
A final issue is status. It is quite important thatyou negotiate with those who are of equal (or greater) status toyourself; otherwise, it is clear that the other parties are nottaking you seriously, if not insulting you. Negotiator status is animportant indicator of the respect with which you and the companyare viewed. If they send negotiators of superior status, then thatindicates that the future relationship will be one of respect andin which parties will attempt to accommodate our company and itsissues. If, however, the negotiators sent by Bacchus and SerbianSteins & Stems are of lesser status, it suggests that thelong-term relationship will be one in which you and the companywill be discounted and marginalized. You should use job experiencerank as a proxy for status, such that a negotiator with no jobexperience has a status of zero; if they only had “oddjob” experience, their status would be 1; seasonal experiencewould be 2, part time experience 3, full time experience 4, andmanagement 5. To compute your status score, you should use thefollowing formula:
Outline the what your resistant point is and what, on the factsgiven, you consider the ZOPA of the negotiation to be.
What steps / strategies to you plan to use to achieve your goal.Remember this is what you are expected to follow in the actualnegotiation.
Taking Hofstede’s cultural dimensions into account outline thekey cultural aspects you think you need to consider in thisnegotiation. What adjustments
can you make to deal with these cultural aspects?
How might unethical behavior affect a negotiation?
Confidential Instructions for Tokyo Saki Role
Bacchus is a successful winery, with 63 fully ownedvineyards scattered throughout the US (although the majority arelocated in California). Bacchus was founded some 20 years ago, andappears to be a successful and growing company, as they havemaintained a strong market share, specializing predominantly inhigh-end wines, although they also produce some moderately pricedwines. Bacchus consistently wins prizes for their wines, bothnationally and internationally, with their wines holding up well toFrench wines in Western Europe, at least outside of Franceitself.
Tokyo Saki produces sake and rice wines, various Asianbeers, as well as a line of alcoholic ginseng products (previouslyacquired from a Korean company). Tokyo Saki has strong market sharewithin Asia, and has been making inroads as a novelty product,especially with its ginseng lines, in Europe and North America. Atleast part of the success of the ginseng lines has been due to thecommon belief that the ginseng root prevents the negative effectsof alcohol on the system (such as liver damage due toover-consumption) and has long been recognized for its medicinaland curative powers in Asia, and more recently in Europe and NorthAmerica.
Serbian Steins & Stems specializes in fine decanters,wine glasses, and accessories. More importantly, however, theyrecently patented a new process that makes fine, delicate crystaland porcelain virtually indestructible, while maintaining itsbeauty and fragile appearance. This development has obviouscustomer appeal, but also significantly reduces the expensesassociated with shipping breakage and the like. If costs can bereduced on the process, it may even be feasible to use thetechnique for bottling, making it attractive as a virtuallyunbreakable bottle for wine and beer, as well as other products.Tokyo Saki recently acquired a small stake in Serbian Steins &Stems, hoping to complement its offerings with the accessories thatwould appeal to the North American and European markets, thusbringing it into the merger talks in a three-way play.
Last year, Bacchus management made overtures to Tokyo Saki in aneffort to acquire their full line. Tokyo Saki declined, butencouraged a discussion of a possible merger between the companies,including the possibility of Serbian Steins & Stems forcontemplation. Such a three way merger might provide Bacchus withcomplementary products and a presence in high-potential markets,while providing Tokyo Saki and Serbian Steins & Stems withproduct visibility and distribution systems that include thelucrative U.S. market. With the increasing popularity of fine winesand accessories, as well as “New Age” herbal medicines, such athree-way merger provides a particularly attractive opportunity.However, there are risks. For example, whether or notBacchus has topped out in its market expansion isn’t clear.And the instability of the political situation in EasternEurope is cause for concern as well, in any deal involving SerbianSteins & Stems. Given the risks and possible benefits, Bacchushas expressed cautious interest in the possibility of a three-waymerger, and these discussions led to a satisfactory agreement onprice, however, there are several issues that are yet to beresolved. These unresolved issues have led to the present meetingbetween your executive groups. In preparation for the meeting, thethree companies have already exchanged appropriate information andfigures. Unfortunately, a merger between any two of the companiesloses significant synergy and is considerably less attractive;hence it is important to negotiate an agreement that issatisfactory to all parties, if there is to be an agreement at all.At this time, the remaining issues to be resolved include:
Stock ownership of the combined company that wouldresult from a merger. The division of stock influences the amountof the annual profits that would accrue to each of the threerespective companies. This issue is, of course, of very highimportance to you. You believe that the division of stock ownershipshould be driven by the fact that you are bringing a totally newproduct line to the table, and that you have a much greater profitmargin than anyone else does at the table. However, you are alsoaware of the fact that Bacchus has a considerably higher value, andthat Serbian Steins & Stems brings something unique to thetable. You believe that these differences entitle you toa minimum of 25% ownership of the combined company.
Control, as represented by the number of voting seats onthe 12-person executive board to be controlled by each company. Itis extremely important to you that you have multiple membersrepresented – enough to wield some level ofpower – on the executive board. This issue is apoint of pride, as you explicitly do not want to be “takenover” by Bacchus — you desire a merger that is respectful ofyour identity and accomplishments. You worry that minimalrepresentation could easily be intimidated and silenced onthe board and would become “tokens” with little or noactual influence. You bring a unique productline – especially with the ginseng products, one that ishighly saleable in multiple markets. This will invigorateBacchus’ currently rather stale lines. In addition, given yoursmall ownership in Serbian Steins & Stems, you are clearlybringing a great deal to the table and your contributionsshould not be minimized.
Management. There are three managementissues. First, is the management of the company in eachcountry? In order to capitalize on the strategic synergies,management issues are key, and it will be critical to staff eachlocation appropriately. It has not yet been established whethereach location would continue to run as they have been running, orwhether the Americans will try to select and send general managers,or whether there will be some form of exchange program orcross-training of managers. However, it is extremely important thatyou have at least one Japanese manager in each location,otherwise you will be unable to appropriately monitor othercomponents of your business and react quickly andappropriately to decisions that are not in Tokyo Saki’s bestinterests. Your preference, of course, is to staff withJapanese mangers, but you realize that is not realistic. Yet, youalso understand the importance of working within a socio-culturalnetwork, and know that the locals have contact that your managersmight lack. Hence, in lieu of Japanese representation, you willaccept local management. The second issue is moretroubling. That is what to do about Nikko Raspovliac, the son ofthe founder of Serbian Steins & Stems. It is your understandingthat he is an unrepentant womaniser, and there are even rumors thathe may be involved with the drug trade. Unfortunately, you learnedof all this after you originally purchased a stakein their business. Raspolivac’s negative reputation willresult in significant loss of face for your company in any publicliaison (and you have debated ending the existing one if you canfind a way out!). It is simply not acceptable to have someone atthe helm whose reputation is so sullied. Finally,the third issue is management incentives, or how tomotivate the management teams towards the common goals of themerged companies. You have always paid your managers an attractivesalary, yet Bacchus has suggested that they be
paid contingent on performance. Although you are willing toprovide a small contingent incentive, you know there are clearlydifferences in the different foci of the companies and that someare simply easier to make a profit at, and any manageraccepting a “difficult” assignment would be penalized. Inaddition, you know that such differences will create status andpower differences among the managers of the different divisions,which is simply unacceptable You strongly prefer no contingentincentives, as you want to continue the culture you have developedat Tokyo Saki, a culture that has served you very well indeed. If acompetitive culture were instantiated, your past experience in Asiasuggests that they refuse to help one another, or lobby forspecific interests, which clearly could be to your detriment. Inaddition you know well that such a plan will substantially reducethe morale among the management team and create conflict andtension.
Form of the agreement is also quite important. Inyour previous negotiations with Bacchus, it seemed as if they werecompletely unwilling to build any flexibility into the agreement.Yet, in merging the three companies, you are charting newterritory, and having some flexibility – to accommodatethe unexpected as it arises – is not only essential, butmakes good business sense. Thus, it is important to you that anyagreement struck be flexible, with adequate safeguards foraccommodating the unexpected. In addition, you find Bacchus’insistence on penalties for minor accommodations in thecontract to be repugnant and insulting, and will clearly damage therelationship among all parties. Your preference is for a contractthat avoids threatening trust by specifying penalties that maynever be needed.
A final issue is status. It is quite important thatyou negotiate with those who are of equal (or greater) status toyourself; otherwise, it is clear that the other parties are nottaking you seriously, if not insulting you. Negotiator status is animportant indicator of the respect with which you and the companyare viewed. If they send negotiators of superior status, then thatindicates that the future relationship will be one of respect andin which parties will attempt to accommodate our company and itsissues. If, however, the negotiators sent by Bacchus and SerbianSteins & Stems are of lesser status, it suggests that thelong-term relationship will be one in which you and the companywill be discounted and marginalized. You should use job experiencerank as a proxy for status, such that a negotiator with no jobexperience has a status of zero; if they only had “oddjob” experience, their status would be 1; seasonal experiencewould be 2, part time experience 3, full time experience 4, andmanagement 5. To compute your status score, you should use thefollowing formula: