1. What were the issues at stake in the negotiation (hint: at least 8 issues)?

2. How does an understanding of cultural values and style affect your ability to understand one's own cultural style, the others' cultural style, and the "interaction" between any two styles, especially in the context of a negotiation between parties from different cultures?

3. How do cultural values affect the way we interpret the appropriateness or inappropriateness of certain "ethical" behaviors?

4. Did you reach an agreement? Why or why not?

5. What basic strategies and tactics were used by the parties (interest-based bargaining, logrolling, etc.) in order to be able to achieve (or try to achieve) a three-way agreement? Were they effective? Why or why not?

Please Don't use AI to answer the questions

ConfidentialRoleInformationforSerbianSteins&StemsRole

Bacchusisasuccessfulwinery,with63fullyownedvineyardsscatteredthroughouttheUS (althoughthemajorityarelocatedinCalifornia).Bacchuswasfoundedsome20yearsago,and appearstobeasuccessfulandgrowingcompany,astheyhavemaintainedastrongmarketshare, specializing predominantly in high-end wines, although they also produce some moderately pricedwines.Bacchusconsistentlywinsprizesfortheirwines,bothnationallyandinternationally,with theirwinesholdingupwelltoFrenchwinesinWesternEurope,atleastoutsideofFranceitself.

TokyoSakiproducessakeandricewinesvariousAsianbeers,aswellasalineofalcoholic ginsengproducts(previouslyacquiredfromaKoreancompany).TokyoSakihasstrongmarket sharewithinAsia,andhasbeenmakinginroadsasanoveltyproduct,especiallywithitsginseng lines,inEuropeandNorthAmerica.Atleastpartofthesuccessoftheginsenglineshasbeendueto thecommonbeliefthattheginsengrootpreventsthenegativeeffectsofalcoholonthesystem (such as liver damage due to over-consumption)and has long been recognized for its medicinal andcurativepowersinAsia,andmorerecentlyinEuropeandNorthAmerica.

SerbianSteins&Stemsspecializesinfinedecanters,wineglasses,andaccessories.More importantly,however,theyrecentlypatentedanewprocessthatmakesfine,delicatecrystaland porcelainvirtuallyindestructible,whilemaintainingitsbeautyandfragileappearance.This developmenthasobviouscustomerappeal,butalsosignificantlyreducestheexpensesassociated withshippingbreakageandthelike.Ifcostscanbereducedontheprocess,itmayevenbefeasible tousethetechniqueforbottling,makingitattractiveasavirtuallyunbreakablebottleforwineand beer,aswellasotherproducts.TokyoSakirecentlyacquiredasmallstakeinSerbianSteins& Stems,hopingtocomplementitsofferingswiththeaccessoriesthatwouldappealtotheNorth AmericanandEuropeanmarkets, thus bringingit intothemerger talks inathree-wayplay.

Lastyear,BacchusmanagementmadeoverturestoTokyoSakiinanefforttoacquiretheir fullline.TokyoSakideclined,butencouragedadiscussionofapossiblemergerbetweenthe companies,includingthepossibilityofSerbianSteins&Stemsforcontemplation.Suchathreeway merger might provide Bacchus with complementary products and a presence in high-potentialmarkets,whileprovidingTokyoSakiandSerbianSteins&Stemswithproductvisibilityand distributionsystemsthatincludethelucrativeU.S.market.Withtheincreasingpopularityoffine wines and accessories, as well as "New Age" herbal medicines, such a three-waymerger provides aparticularlyattractiveopportunity.However,therearerisks.Forexample,Bacchusisnotsureof thepotentialmarketforricewine,asitisfrequentlyconsideredtoosweetbymostNorth Americans,andmaynotfitwellwiththesophisticatedimagethatBacchushasworkedhardto develop.WhetherornotBacchushastoppedoutinitsmarketexpansionisn'tclear.Theredoes appeartobeafledglingmarketforSakiandAsianbeer,andespeciallyginsengproducts,with considerablepotential.TheimpactoftherecentAsianfinancialcrisisonJapanesecompaniesisalso aconcern.Giventherisksandpossiblebenefits,Bacchushasexpressedcautiousinterestinthe possibility of a three-waymerger, and these discussions led to a satisfactory agreement on price,however,thereareseveralissuesthatareyettoberesolved.Theseunresolvedissueshaveledto thepresentmeetingbetweenyourexecutivegroups.Inpreparationforthemeeting,thethree companieshavealreadyexchangedappropriateinformationandfigures.Unfortunately,amerger

betweenanytwoofthecompanieslosessignificantsynergyandisconsiderablylessattractive; henceitisimportanttonegotiateanagreementthatissatisfactorytoallparties,ifthereistobean agreementatall. Atthistime,theremainingissuestoberesolvedinclude:

• Stockownershipofthecombinedcompanythatwouldresultfromamerger.The divisionofstockinfluencestheamountoftheannualprofitsthatwouldaccruetoeach ofthethreerespectivecompanies.Thisissueis,ofcourse,ofveryhighimportanceto you.Youbelievethatthedivisionofstockownershipshouldbedrivenbythefactthat youarebringingatotallynewproductlinetothetable,andyourprofitmarginsare outstanding.However,youarealsoawareofthefactthatBacchushasaconsiderably highervalue,andthatTokyoSakibringsnewlinestothetableaswell.Although somewherecloseto1/3ofthestockforeachcompanyisprobablyfair,youarealso awarethatothersmaynotagree.However,allinall,youbelievethatwhatyoubringto thetableentitlesyoutominimumof20%ownershipofthecombinedcompany.

• Control,asrepresentedbythenumberofvotingseatsonthe12-personexecutive boardtobecontrolledbyeachcompany.Itisextremelyimportanttoyouthatyouhave multiplemembersrepresented-enoughtowieldsomelevelofpower-onthe executiveboard,asyouareconcernedaboutapotentialvotingblockoftheAmericans andJapanese.Inaddition,thisissueisapointofpride,asyouexplicitlydonotwantto be"takenover"byBacchusyoudesireamergerthatisrespectfulofyouridentity andaccomplishments.Youworrythatminimalrepresentationcouldeasilybe intimidatedandsilencedontheboardandwouldbecome"tokens"withlittleorno actualinfluence.Youbringauniqueproductline-especiallywithyourpatented process,onethatishighlysaleableinmultiplemarkets.ThiswillcomplementBacchus' currentlyrather stalelines. Clearlybringingagreat deal tothetableandyour contributions should notbe minimized.

• Management.Therearethreemanagementissues.First,isthemanagementofthe companyineachcountry?Ithasnotyetbeenestablishedwhethereachlocationwould continuetorunastheyhavebeenrunning,orwhethertheAmericanswilltrytoselect andsendgeneralmanagers,orwhethertherewillbesomeformofexchangeprogram or cross-trainingof managers. However, it is extremely important that you have local managersfortheSerbianSteins&Stemscomponentofthemerger,inorderto capitalizeonuniquesynergiesavailabletoyouinyourownlocales. Thesecondissue isevenmoreimportant.NikkoRaspovliac,thesonofthefounderofSerbianSteins& Stems,washeirapparenttothebusiness.Itiscriticalthathekeephispositionatthe helmoftheSerbianoperations,bothasamatterofprideandidentity,butalsoto ensurethatthebusinesscontinuestobeprofitableforthefamilythathasownedit. Nikkohashadsometroublesinthepast,buthisdaysofsowinghiswildoatsareover. Andheclearlyknowstheropesandknowshowtogreasethewheelsofthelocal officialsinordertogetthingsdoneandtogetadvantageouspricesonrawmaterials andthelike.Nevertheless,youdoexpectsomeresistanceoverretainingNikkotoarise atthetable.Finally,thethirdissueismanagementincentives,orhowtomotivatethe managementteamstowardsthecommongoalsofthemergedcompanies.Youprefer topayyourmanagerscontingentonperformance.Althoughyouarewillingtoprovide somesalary,youpreferthatalargepartofeachmanager'scompensationbepaidinthe formofacontingentbonus.Pastexperienceindicatesthatthiscansubstantially increase performance

• Formoftheagreementisalsoquiteimportant.Inyourpreviousnegotiationswith Bacchus,itseemedasiftheywerecompletelyunwillingtobuildanyflexibilityintothe agreement.Yet,inmergingthethreecompanies,youarechartingnewterritory,and havingsomeflexibility-toaccommodatetheunexpectedasitarises-isnotonly essential,butmakesgoodbusinesssense.Thus,itisimportanttoyouthatany agreement struckbeflexible, withadequatesafeguards for accommodatingthe unexpected.Inaddition, youfindBacchus' insistenceonpenalties for minor accommodationsinthecontracttoberepugnantandinsulting,andwillclearlydamage therelationshipamongallparties.Yourpreferenceisforacontractthatavoids threateningtrustbyspecifyingpenaltiesthatmayneverbeneeded.

• Afinalissueisstatus.Giventherelativestatusofwomeninyoursociety,aswellas muchoftheworld,youbelieveitappropriatethattheotherpartiesatthetablesend malenegotiators,whoareofsuperiorrelativestatus,andalsogenerallyhigherup withinthecompanies.Iftheysendfemalenegotiators,itmaybeasignthattheyare nottakingyouquiteasseriously,and,dependingonthestatusofwomenwithintheir ownsocieties,perhapsinsultingyou.Negotiatorstatusisanimportantindicatorofthe respectwithwhichyouandthecompanyareviewed.Iftheysendnegotiatorsof superiorstatus(males),thenthatindicatesthatthefuturerelationshipwillbeoneof respectandinwhichpartieswillattempttoaccommodateourcompanyanditsissues. If,however,thenegotiatorssentbyBacchusandSerbianSteins&Stemsareoflesser status(females),itsuggeststhatthelong-termrelationshipwillbeoneinwhichyou andthecompanywillbediscountedandmarginalized.Youshouldcomputethe averagestatusofyourownnegotiator(s)andofallothernegotiatorsgivingfemalesa rankofoneandmalesarankoftwoandthenapplythefollowingformula:

[(AverageStatusofTokyoSakiNegotiators)-(AverageStatusofotherNegotiators)]*(-20)

Tohelpyouinyournegotiations,yourteamhasconstructedatable(attached)oftheissues anddevisedapointschemetohelpyouprioritizeamongtheissuesandselecttheoptimal agreement-allyouneedtodoisto"maximize"yourpointvalueandyouwillhavethebest agreementforSerbianSteins&Stems.Notethatthepointschemerepresentsaone-timeestimate of the combined long-term financial and symbolic impact of any deal component.To assess thetotalvalueofanyoffer,addupthepointsassignedtoeachcomponentofthe"package."You mustassumethatthevalueestimatesofeachsettlementareaccuratelyrepresented.

Donotshowthistabletoanyoneelse,norshouldyourevealspecificpay-offinformation!

Issue:	Spread:	Minimum	Maximum
StockOwnership	1172	-200	972
BoardSeats	170	-50	120
ManagementStaffing	100	0	100
Nikko Raspovliac	400	-200	200

ManagementCompensation	75	0	75
FormofAgreement	50	0	50
	Total:	-450	1517

EvaluationofNegotiatedAgreementsforSerbianSteins&Stems
Issue	Point Value
SerbianSteins&StemsStockOwnership1 lessthan20%	200pointloss
each%above19%isworth:	12 points
Control(SerbianSteins&StemsseatsonBoard)2fewerthan3seats	50pointloss
eachseatabovetwoisworth:	10 points
ManagementStaffing:Upperlevelmanagementineachlocationto:
belocallystaffed(polycentric)	100points
bestaffedbybestmanagement,regardlessofnationality(geocentric):	0points
at least one manager fromthenon-localcountries:	30 points
Includeproportionalrepresentationfromallthreecountries:	60 points
NikkoRaspovliac firehim	200points loss
buyhimoff(heleavesfirm)	100pointsloss
placehiminpowerlessposition	50 points
retainasmanagement	200points
ManagementIncentive:lessthan5%ofpaycontingentonperformance	0points
0%-15%ofpaycontingentonperformance	25 points
16%-25%ofpaycontingentonperformance	50 points
greaterthan25%ofpaycontingentonperformance	75 points
Termsoftheagreement:
flexiblecontract,thatspecifiesonlythegeneraltermsofagreement,&allows formodifications	50
Specificallydelineatedcontract,thatsuggestspenaltiesfornon-compliance	0
Specificallydelineatedcontractwithclearlyspecifiedpenaltiesfornon- compliance	0
Status3: femalestatus=1,malestatus=2
(AveragestatusofSerbianSteins&Stemsnegotiators-Averagestatusofall othernegotiators)*(-20)=
TOTALPOINTS