What would you do next if you were in Mr. Soota’s position? Explain why. Bad blood Our group, the Venture Group – a mother company in India, with as branch head, Mr. Soota – received an offer to invest $2 million in a joint venture between Brigitte Zankyl GmbH in Munich and DXB-Al Fayed Corporation in Saudi Arabia. The proposed project was to build a plant in a small town near Riyadh to make blood transfusion tubes to sell in the Middle East. The German company had the technical expertise; the knowledge, capital and funding required was to be provided by our company. At this point, Venture was in the process of negotiating the contract.

DXB-Al Fayed was a partner in the business because it had managed to negotiate and win a favourable contract with the government for the purchase of the plastic tubes. The Saudi Arabian company was in a very comfortable position: it had no financial stake in the project and was a 35 per cent partner in the business by virtue of its good contacts with the Saudi government and its in-depth knowledge of the local market.

A few senior managers from our company were asked to go to Riyadh to explore the viability of the investment. Two weeks later, after our managers had returned, the company was more convinced than ever that this was going to be a wonderful project. We only had to wait for another three weeks since the German negotiating party was going to negotiate and conclude the contract after having received the necessary approval from us.

A large delegation of nine people, including lawyers from Germany, prepared themselves for the negotiations.

On the first evening after negotiations had started, we heard by phone from the German side that things were looking good.