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Negotiation case study
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The Pacific Oil Company was formed in 1902 and had been the leader in the manufacturing of a petroleum product Vinyl Chloride Monomer (VCM). This product was Pacific Oil's major product line and was the main component to the manufacturing of plastics, used in many products. In 1979, Pacific Oil had landed a major contract with reliant and had over the years establish a great working partnership. The Reliant Corporation was one of Pacific’s largest and most valued customers and Pacific Oil Company wanted to renegotiate their current contract with the Reliant Corporation, with the goal of extending before it expired. Pacific’s negotiation team, Jean Fontaine, Marketing Vice President for Europe with Paul Gaudin, Marketing Manager of VCM along with representatives Frederick Hauptmann, Senior Purchasing Manager and Egon Zinnser, Regional VP for European operation from The Reliant Corporation, where to spend nearly two year working through the extension of the contract. In the end, the contract settlement was down to a final item that Pacific was not happy about, that may my then loose the extension altogether.
Facing Hard Times
Pacific Oil company was facing some economic changes over the next 10 years and the demand for its VCM was going o face some fierce competition. In the next 20 - 30 months other VCM manufactures will be producing the raw product to compete directly with Pacific Oil Company. The supply of the product over the next decade was expected to grow by over 1000 MM pounds each year, nearly doubling that as each year progressed. This poses a massive threat to Pacific oil as it negotiates its contracts only five years our and is now being pressured by Reliant to only extend their contract by three years. Reliant was...
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...ine and Gaudin was going to present. Reliant had done their homework on their demands, potential softness of the market and was preparing themselves adequately to be able to deal with any changes. Pacific was not as prepared at the negotiation table as Reliant, and was eventually backed into a corner on a single item in the renewed control, the option for Reliant to re-sale any VCM product they have left over. The was a major oversight on the final advice from Kelsey in securing a huge customer and giving them time in further analysis the demand and impact that the new manufacturers would cause.
Reference
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation Readings, Exercises and Cases (6th ed.). New York, NY, US: McGraw-Hill.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2011). Essentials of Negotiation (5th ed.). New York, NY, US: McGraw-Hill.
Lewicki, J. R., Barry, B., & Saunders, M. D. (2010). Negotiation: Readings, exercises and cases
Fisher, Roger, William Ury, and Bruce Patton. Getting to yes: negotiating agreement without giving in. 2nd ed. New York, N.Y.: Penguin Books, 1991. Print.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2006). Negotiation Readings, Exercises, and Cases Fifth Ed. Bill Brubaker, Mark Asher, A Power Play for Howard Negotiation (pp. 616-626). New York, NY: Mcgraw-Hill Irwin.
Lewicki, J. R., Barry, B., & Saunders, M. D. (2011). Essentials of negotiation (5th ed.). New York, NY: McGraw Hill. ISBN-13: 9780073530369
...d be in peril because Reliant could essentially control the prices of the product. Then sell it to potential Pacific clients, thus eliminating any future revenue streams. If Reliant insists that this is a deal breaker, then stopping or stalling the negotiations may be the only resort, because Pacific Oil needs to regain control the negotiation. This may allow another competitor to come in and make their pitch, but Pacific Oil cannot afford any more concessions nor can they afford to allow Reliant to take away potential customers or control their formula costs.
McCarthy, A. (n.d.). 10 rules of negotiation. Negotiation Skills. Retrieved March 31, 2014, from http://www.negotiation-skills.org
The four principles for effective negotiation are to 1) separate the people from the problem; 2) focus on interests rather than positions; 3) generate variety of options before settling on an agreement; and 4) insist that the agreement be based on objective criteria. [p.11] Each one of these principles should be looked at during each stage of the negotiation process. The process as explained in the book begins with analysis of the problem or situation. The next stage is to plan ways to react or handle the situation. The last stage is the discussion part where a solution to the problem is examined and agreed upon.
Life seemingly comprises an infinite array of diverse negotiations, filled with choices to decide which ultimately result in both positive and negative outcomes. The following reflection paper relates the previous week’s course materials to an ongoing professional transaction spanning approximately 15 months. The business arrangement has identified strengths, weaknesses, threats, and opportunities -- understanding “BATNA” or the “best alternative to a negotiated agreement” has helped me to understand how to proceed with the negotiation process (Griffith & Goodwin, 2013, p.138). The following paper summarizes a variety of negotiations transpiring simultaneously throughout professional endeavors.
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
During this course, I have learned a lot about negotiating. We learned about almost every negotiating technique there is. We learned about cross-cultural negotiations, body language, Best Alternative To a Negotiated Agreement (BATNA), variables in negotiating, and many more. Before this course, I did not know that much about negotiating. I thought that negotiating was just about trading or convincing someone to give you what you want and you did not care about the other side, resulting in a win-lose. I now know that negotiating is about getting what you want, but also giving the other side what they want as well to result in a win-win. This paper is about how I am going to improve my negotiating skills over the next six months. In order for me to improve my negotiating skills, I believe I need to improve the following skills- my body language, communication, planning, and my interpersonal communications. By improving those skills, I can become an effective negotiator.
The importance of this company can be observed with the fact that the government also decided to be the partner of Kuwait Oil Tankers Company in the years 1976 and contributed in the capital of the company that was more or less forty nine (49) percent of the total shares. The history of their success is not limited as we can see that after three years, in the year 1979 Kuwait Oil Tankers Company decided to bring a new change and they started the...
The following discuses on the topic of negotiation which relates that interest based negotiation can achieve better outcomes than position bargaining in maintaining good relationship .The term Negotiation occurs when more than two people and groups come together to reach an agreement that is mutually satisfactory over a debate. Negotiation skills are used in building suitable environments for reaching such agreements.(B. Elder 1994 P112) Arguing on the other hand is a form of conflict any conflict situation has the potential to involve destructive conflict or constructive conflict. Conflict resolution is often achieved by negotiation. Arguing is a term used for conflict others are discussion,
The negotiation process theoretically begins with the initial decision to bargain and the structure of the negotiation in terms of their negotiating partner, although some of these decisions may be constrained by its context (Barry & Oliver 1996, p132). In a private real estate transaction, for instance, the potential buyer has the option not to bargain and to take at initial price, or they could place an offer and work towards a price beneficial for both parties. However, in situations where the option to bargain is not limited, the relationship between the parties may be used to explain the negotiator’s initial decision. Empirically, it is found that parties who are close place greater importance in the preservation of the relationship through compromise and even yielding, rather than working in collaboration (Barry & Oliver 1996, p132). These parties may view the risk of damaging the relationship to be of greater loss than the losses incurred in bargaining and will therefore be less inclined to negotiate over other non-confrontational options that are available. It is also true th...
Negotiations are a natural inclination for human-kind when enough pain has been endured and the chances of victory do not inspire confidence. The
Years ago, negotiation was seen as an 'intellectual' activity - a meeting of the minds, challenging each other's ideas and concepts analytically and dispassionately. Displays of emotion were disparaged with lines like, "There's no need to get all emotional, it's just business."