Critically examine FIJI Water's power moves and use of threats in their neogtiations. Were they effective? aka Are the threats credible? Are they motivated by strategy or based on emotions? Could their threats create a counterthreat?

Would Fiji or FIJI water bear more costs associated with the threats if they were actually carried out? What is FIJI Water's BATNA? What is the Fijian government's BATNA? Next, analyze the Fiji negotiations in terms of parasitic value creation. (in this case, the parasitic value creation occurs when both FIJI water and the Fiji government benefit at the expense of another group). To avoid parasitic value creation other parties should be present at the negotiation table. Were any parties excluded from the negotiations who should have had a place at the table? And if so, what could be the possible negative outcomes as a result of their absence? Win-Win negotiation Could you imagine a possibility where FIJI Water and the Fijian government could have created a win-win situation that was better than the actual outcome of this real-life scenario?

 

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1230 HARVARD BUSINESS SCHOOL 9-912-030 REV: AUGUST 25, 2014 FRANCESCA GINO MICHAEL W. TOFFEL STEPHANIE VAN SICE Fiji versus FIJI: Negotiating Over Water On November 26, 2010, a public fight broke out between FIJI Water, one of the world's premium bottled waters, and the government of the Republic of Fiji, the island nation where FIJI Water extracted and bottled its product. In its annual budget statement that year, the Fijian government had announced a plan to increase the tax on water extraction from 0.33 Fijian cents to 15 Fijian cents per liter, a 45-fold increase. The tax increase would only apply to companies extracting at least 3.5 million liters (925,000 gallons) per month, which meant it applied only to FIJI Water, the only bottler whose volume exceeded this threshold. Three days after the tax increase was announced, FIJI Water responded by publicly referring to the tax as "discriminatory" and announcing that it would immediately close its bottling operations. The plant's 400 employees-many of whom openly wept at the announcement-were instructed to vacate the premises and leave all company property and clothing behind. The company also announced the suspension of its engineering and support services contracts, and the cessation of its investments in development projects around Fiji.2 "We consider the government's current action as a taking of our business," the company announced in a press release, "and one that sends a clear and unmistakable message to businesses operating in Fiji or looking to invest there: The country is increasingly unstable, and is becoming a very risky place in which to invest." 1230 HARVARD BUSINESS SCHOOL 9-912-030 REV: AUGUST 25, 2014 FRANCESCA GINO MICHAEL W. TOFFEL STEPHANIE VAN SICE Fiji versus FIJI: Negotiating Over Water On November 26, 2010, a public fight broke out between FIJI Water, one of the world's premium bottled waters, and the government of the Republic of Fiji, the island nation where FIJI Water extracted and bottled its product. In its annual budget statement that year, the Fijian government had announced a plan to increase the tax on water extraction from 0.33 Fijian cents to 15 Fijian cents per liter, a 45-fold increase. The tax increase would only apply to companies extracting at least 3.5 million liters (925,000 gallons) per month, which meant it applied only to FIJI Water, the only bottler whose volume exceeded this threshold. Three days after the tax increase was announced, FIJI Water responded by publicly referring to the tax as "discriminatory" and announcing that it would immediately close its bottling operations. The plant's 400 employees-many of whom openly wept at the announcement-were instructed to vacate the premises and leave all company property and clothing behind. The company also announced the suspension of its engineering and support services contracts, and the cessation of its investments in development projects around Fiji.2 "We consider the government's current action as a taking of our business," the company announced in a press release, "and one that sends a clear and unmistakable message to businesses operating in Fiji or looking to invest there: The country is increasingly unstable, and is becoming a very risky place in which to invest."

Answer rating: 100% (QA)

FIJI Waters Power Moves and Threats FIJI Waters response to the tax increase included public labeling of the tax as discriminatory and an immediate closure of its bottling operations The company also ... View the full answer