Please read this article and compleetee the Strategic Global Negotiation Preparation Guide Worksheet. Thank you
Strategic Global Negotiation Preparation Guide Who are the parties interested in the negotiation? What are the issues? (Le, price, contract terms, etc\") 0 Issue 1 0 Issue 2 0 Issue 3 (For parties, list individual or entity that cares about the outcome of the negotiation. For issues, focus on subjects that need to be addressed during the negotiation.) List your interests for each issue Issue 1 Issue 2 Issue 3 I I I I I I I I I I I I I I I List their interest for each issue Issue 1 Issue 2 Issue 3 I I I I I I I I I I I I I I I (Prioritize interests. Circle shared interests and identi di'erin and o osed interests Cultural Differences and Similarities Your cultural orientation Theirs I I I I I I I I What do you need to learn from the other side? What questions will you ask? (Think about how, not just What you will communicate) t Offers and options setting for issue 1: 0 Offers and options setting for issue 2: t O'ers and options setting for issue 3: Value Creating Options: (List options even if you think that you may reject them later How is it now? Where would you like it to be? What can you do to close the gap? What authority does the other party have to negotiate and make the decision? (Separate the people from the problem. Are there any relationship problems to address? What can you do in the ne otiation to im rove the relationshi ? What is your BATNA (Best Alternative E Negotiated Agreement): Ways to improve your BATNA What is their BATNA? Ways to test or, if appropriate, worsen their BATNA (Consider how you might improve your leverage in the negotiation; how to share your leveragerelated information (BATNA), or communicate it?) MEDLEE: IN PURSUIT OF A HEALTHY JOINT VENTURE Condential Instructions for Pat Armstrong, MedDevice, Inc's Director of International Strategic Market Research You are Pat Armstrong, Director of International Strategic Market Research. You have been working at MedDevice, inc. since you earned your MBA two years ago and landed this much- coveted position. You were hired to survey and analyze potential overseas market opportunities and have just completed your analysis of the Southeast Asian region. Your research indicates that while most of the Southeast Asian countries possess markets ripe for MedDevice's products, the best way to enter the market is via joint venture partnerships with local companies who have the distribution networks and local know-how necessary for success in this business. Your research report has been very well received and the company has begun exploring potential joint venture partners in Singapore, Taiwan, Thailand, Hong Kong, and Malaysia. Trying to Make the Move From Research to International Management While you have enjoyed and excelled at strategic market research, you are anxious to expand your job profile to include establishing and operating overseas ofces. You would like to be involved directly in the business aspects and implementation of your research results. You have approached your boss, the General Manager of International DeveloPment, and made the case that since you created the plans, and you have academic experience in international affairs and international negotiation (you took several courses on these subjects while in business school), you should be included in any negotiations regarding international ofces. You also argued for your direct involvement in the oversight and operation of these new ofces. Your boss is thinking about your suggestions and plans to bring up stafng issues on these new projects at a meeting with the Vice Presidents next month. Because MedDevice is a large organization with standardized procedures, it is necessary to get management and human resources approval before changing your job responsibilities. Your boss is currently on a three-week safari in Kenya. You are anxiously awaiting her return and her decision on your future role in overseas expansion. You have also shared some of your ideas with MedDevice's CEO. Several weeks ago at the company picnic, you met and chatted at length with CEO Ralph Thompson. You and he really hit it off and had an interesting conversation about the appalling failure rates of international joint ventures. You noted that 60% of these ventures fail and suggested that the problems might stem from a failure during the negotiation process to explore and to agree upon how the two component companies would work together. Mr. Thompson seemed genuinely interested in your ideas. You wished your boss were as receptive as he was to your thoughts. A Ehance Oprtunity Upon his return from Thailand, Mr. Thompson intended to give the MedLee Joint Venture explorationegotiation project to the General Manager of international Development (your boss). He discovers, however, that she is unreachable in Kenya for the next few weeks. Not wanting to wait for her return, he looks for someone eIse and calls you into his ofce. Mr. Thompson describes his discussions with Mr. Lee and says to you, "i think we have a near- perfect situation here. Lee Medical Supply understands where we are coming from. We really have the potential to forge a protable ailiance because both Mr. Lee and I (as well as our respective companies) want the same things out of ajoint venture. I don't think we'll have any problems working things out. in partnership with Lee Medical Supply, MedDevice has the potential to become a signicant player in the Asian market." Then, to your elation, Mr. Thompson says that he has chosen you, in your boss's absence, to work on solidifying the MedLee joint venture. He teils you that he and Mr. Lee have sketched out the priority issues that need to be explored and suggests that you meet with your counterpart at Lee Medical Supply ASAP to discuss and develop a preliminary proposal resolving some of the questions associated with these issues. Mr. Thompson says, "I don't expect you to have a formal agreement written up after the meeting, but I want you to have a joint proposal that Mr. Lee and I can review when we meet. Then with the general agreements out of the way, we can involve the lawyers and accountants to formalize everything at the next stage of the process. I'll give you the notes that I made on the airplane that lay out the issues and my thoughts on them. They should be fairly self-explanatory. My main goal is for you to ensure that the critical issues that may affect the future of MedLee are worked out in a way that is both true to MedDevice's corporate character and capitalizes on the strengths of Lee Medical Supply. We need to ensure that what we agree upon makes it easy for us to work together in the future, especially since you told me how many joint ventures fail. I want this to be a success." Mr. Thompson continued: "By the way, time is of the utmost importance. In addition to my wanting to meet the pseudodeadiine set by Mr. Lee's upcoming visit, I want to get this deal put together in time so that I can ask the Board of Directors for the capital appropriation before the end of this scal year, which ends in eight weeks. We'll be on a very tight timeline to get this done, but it will save us a lot of scrutiny and headache from the Board if we meet the scal year deadline. Get to it! Let's see what We can do to beat the odds against success of international joint ventures." You are thrilled to have this assignment. You realize how much is riding on this: your ability to become more intimately involved in international operations, the future of this joint venture, and the CEO's (not to mention your boss's) opinion of you. This is a great opportunity to perform well and to broaden your international business experience beyond strategic research. Mr. Thompson's Notes Turning to Mr. Thompson's notes, you are amused to find that the notes he wrote on the airplane are written in perfect MedDevice Memo format. He really is a company man. MedDevice and its quest for uniformity and standards! TO: MedDevice Representative(PAT ARMSTRONG) FROM: Ralph Thompson, CEO, MedDevice RE: Preliminary Negotiations re: MedLee, Ltd. Joint Venture Objective: To set up an international joint venture with Lee Medical Supply, Thailand. The new entity will be called MedLee, Ltd. and will be an international sales office located in Bangkok, Thailand, that will sell and distribute MedDevice brand CAT Scanners, MRIs and pacemakers in Thailand and Southeast Asia. MedDevice will provide 60% of the capital and Lee Medical will provide the remaining 40%. See Memorandum of Understanding. Task for MedDevice Representative: Meet with counterpart at Lee Medical Supply Company to discuss and create a preliminary proposal for MedLee joint venture on the key issues below. What follows are the main issues and my thoughts on each. Issues and Instructions for Preliminary Negotiation 1) Decisionmaking/Control . Major decisions to be taken by the General Manager with majority approval by a Board of Directors to be appointed by Mr. Lee and myself. I envision the Board of Directors as consisting of five members: three appointed by MedDevice, and two by Lee Medical (in approximate proportion to the percentage of capital contribution by each company). . Voting within the Board should be one-man one-vote, majority rules. 2) Staffing I expect the following structure should be sufficient for MedLee, Ltd. for the time being: One General Manager (appointed by MedDevice, since we contribute 60% of capital. It is important to have a MedDevice person head the office for quality control reasons and for knowledge of the medical devices. The GM will oversee the entire operation and be ultimately responsible for business results of the venture). . One Manager (appointed by Lee Medical, to advise and assist the GM on issues of local importance, as well as to cultivate local relationships with customers The manager will be responsible for client interaction and management of the office staff).- Four Sales Representatives (three appointed by Lee Medical, and one by MedDevice to execute sales and create distribution channels. These individnais should have extensive local knowledge of the markets and customers as well as speak the appropriate language. I would envision these sales representatives to be geographically specialized; i.e., one will take care of Thai business, another, Hong Kong, Taiwan and Singapore, and another, Malaysia and Indonesia.) 0 Two Secretaries/Ofce Assistants (appointed by Lee Medical, who knows local conditions and markets better than we do. These Secretaries will assist the Manager and Sales Representatives. The GM will bring his/her own assistant as is customary at MedDevice.) - Anti-Nepotism Rule: We should enforce this at MedLee, but perhaps we can make an exception to our rule for Mr. Lee's son. l got the impression that Mr. Lee wanted him to be invoived in this venture. But we need to avoid a situation in which all of Mr. Lee's relatives end up working at MedLee. This could have the negative effect of creating precedent for our other joint ventures around the world and conict with MedLee's appearance of fair treatment for all and promotion based on merit, as opposed to connection. The bottom line is that we need to ensure that we have the best quality workers who are fairly evaluated -- there should be no favoritism at MedLee. 3) Prot Distribution Because we want to invest in the Asian market for the long terrn, we would agree to have no prots withdrawn from operations for the rst ve years of the joint venture. Thereafter, we can assess the future direction of the venture and then agree upon what to do. MedDevice is stable nancially, and since this is only one project of many that we undertake each year, there should be no problems for us back home with this policy. 4) Conict Resolution Mechanism i prefer to have any disputes that arise referred back to Mr. Lee and me for discussion; if there is no resolution, then the dispute should be resolved through the California Court System or through international arbitration. 5) Timing ASAP. I need to discuss results of preliminary negotiations with Mr. Lee in three weeks. I also hope to request the capital appropriation from the MedDevice Board of Directors before the end of the scal year in eight weeks
