International Negotiations - Case of Lansa and Newco - Essay Example

International negotiations (Lansa and Newco Case) International negotiations refer to a dialogue between two or morenations with each nation aiming at gaining an advantage that will satisfy their interests. In this paper, I’ll discuss the considerations and skills involved during international negotiations between two companies that are from two different nations (Brett 5). The first company is National Electronics Wares, Inc. (Newco). It is a Corporation located in USA Arizona. It manufactures and distributes extremely “high tech” information systems. The other company is Lopez y Arricoitxea Nacional, SA (Lansa). It is a Sociedad Anonima specializing in the manufacturing and distribution of telecommunications equipment. The government partially regulates Lansa (Brett 33). The Argentine Ministro de Industria Tecnologica serves on the Board of Directors. Lansa’s headquarters is in the outskirts of Buenos Aires; however, all the manufacturing and distribution comes out of Mexico. Newco’s CEO, Mr. Abercrombie, has the mandate to expand into South America with a new product line called “infomatrix”. Infomatrix is a remarkable telemetry unit that facilitates voice and data communication between all types of vehicles such as automobiles, boats, helicopters. Since Newco had previously approached Lansa at an international Telecommunication convention in London, Newco’s CEO decides to try again. On the other hand, Lansa is doing well. The CEO, Mr. Lopez, has also heard about infomatrix. He decides to approach Newco having seen that a joint venture can further boost the success of his company (Rubin 14). Objectives Newco’s objective aims at raising the value of the stock. Their main concern is to get a written document that would permit public disclosure. Lansa’s concern is dealing with an American company. It believes it has something to offer and its willingness to carry what it can understanding (Rubin 45). Lansa would also like to have a document in writing that would permit public disclosure. Mr. Arricoitxea thinks of securing an office in the upcoming elections and the company’s success would be a significant boost during his campaign. Both Newco and Lansa are aiming at taking advantage of NAFTA. Considerations Mr. Abercrombie sends a five man advanced team to Mexico upon request from Mr. Lopez. The negotiation advanced team comprises a representative of the corporate managers who is the lead negotiator, a corporate lawyer, a market analyst, a telecommunication engineer and a representative of the corporate shareholders. The representative of corporate managers brings in and supports the ideas and proposals of the corporate managers. By representing the interests of the corporate managers, he is in the best position to lead the negotiating team (Rubin 56). The corporate lawyer will ensure that all the transactions made are legally binding within the law. His knowledge in corporate law will be a key factor to be used during the negotiations. The market analyst can assess the viability of the market for the product. He analyzes the market price and other economic aspects that will help determine if the product will succeed in the proposed market. He will be able to convince the Lansa Company that the product will succeed in their market (Thomson 77). The telecommunication engineer becomes equipped to give any details with regards to the infomatrix. His knowledge of the product will be extremely useful in negotiating for the importance of infomatrix in the market. The representative of the shareholders will be able to back the other negotiators in his team during negotiations since he is representing the interests of the corporate shareholders. The main players in the international negotiations are Newco and Lansa. Newco has a new product, “infomatrix” that could enable them to expand to the South American market and hence further increase its profitability in the future. Lansa believes that a joint venture with Newco could further boost its success in the near future (Rubin 89). From the Latin American point of view, during the negotiation process, they should convince the Newco negotiating team that a joint venture with them will lead to the success of the infomatrix product in the Latin American market (Brett 56). They should support their case by presenting Newco with statistics indicating their current success in the Latin America. They should also state their readiness to work with Newco. From the North American point of view, during the negotiation process, they should convince Lansa that the infomatrix will be of substantial benefit to the Latin American people as it is already to the North Americans (Thomson 34). They should argue that the introduction of the product to the Latin American market would contribute to further technological development of South America. They should express their readiness and willingness to work with Lansa. There may be language barriers since the North Americans speak English and the South Americans mainly speak Spanish. However, the meeting should take place in Mexico since the Newco Company is planning on expanding to South America (Rubin 74). The negotiating team from Newco should be there physically so that they get a feel of what they are negotiating for. Culture is also a challenge during negotiation. Culture defines the various ways communities evaluate things. Hence the North Americans and South Americans may interpret and understand the key aspects negotiated differently (Brett 66). Issues that have surfaced include general misconduct of some of the males from Lansa. During the business meeting with the President of Newco, some of them got quite close to her while talking to her (Rubin 34). This is unethical and immoral in regards to a business meeting. There is also the issue of prejudice. The minister who sits in the board of directors of Lansa is Anti-American. This can hinder close working relations with the Newco group. Proper protocol would dictate that the males involved in the unethical behavior be excluded from the negotiations and the minister be educated on the North American culture so as to ease his bias against them (Thomson 38). How does the Mexican culture affect the telecommunication industry in South America? The bases of trust are minimal. Both companies are being tactful. Lansa thinks that Newco is no longer interested with them. In order to find out if Newco is still interested, Mr. Arricoitxea of Lansa invites the CEO of Newco for an all paid expense fishing tournament in Peru. The CEO without notice sends the president of Newco on his behalf since he is busy. Some of the risks taken by Newco include the uncertainty of the success of the infomatrix product in the Latin American market, possibility of competitors coming into the market in the near future, breakdown of the equipment (Brett 83). Risks taken by Lansa include commercial risks, for example, Newco could pull out in the future. Time plays a crucial role. Mr. Abercrombie is running against time to close the deal with Lansa. This is because the more he delays, the more the value of the stock depreciates. The decision makers are mainly the corporate managers of Newco plus the Board of Directors from Lansa (Rubin 16). They hence become well equipped with the background information of their respective companies and also can be able to foresee possible steps that can lead to success of their respective companies. The agreement between Newco and Lansa should be in the form of a joint venture. This is because Newco is providing the infomatrix product while Lansa is providing the ready market which includes the Latin Americans. Works Cited Brett, J.M. Negotiating Globally: How to Negotiate Deals, Resolve Disputes, and Make Decisions across Cultural Boundaries. San Fransico: Wilskot, 2001. Rubin, Jeffrey Z. The Actors in Negotiation’ in International Negotiation. San Francisco. New York: Jossy-Bass Publishers, 1991. Thomson, L.L. The Mind and Heart of the Negotiator. Upper Saddle River, N.J: Pearson Education International, 2005. Read More