Introduction
The crisis in the negotiations between Vendros Technologies and Netcom Brasil is connected to numerous issues of different nature and requires particular consideration for its successful resolution. Although their partnership seems to be a profitable endeavor for both parties, in the long run, it is not going to be successful until all the problems are adequately addressed. This condition implies the necessity to pay attention not only to the very subject of the prospective agreement but also to the cultural differences and the stemming varying perceptions of negotiators. From this perspective, it is vital to determine the principal and agents, identify all issues and stances in this respect, describe Vendros’ BATNA and its implications, define the channels of persuasion, and recommend negotiation practices. Therefore, the purpose of this report is to examine the above aspects of the matter and suggest an appropriate course of action for Vendros to arrive at an agreement with Netcom Brasil.
The Principal and Agents for Negotiation
The first step leading to the resolution of misunderstanding between Vendros Technologies and Netcom Brasil is the definition of the principal and agents for the upcoming negotiations. In this case, the primary decision-maker or, in other words, the principal party is presented by the attorney from Vendros David Harrow and “Fabio de Gioia and Tom Silver, the account executives for Netcom Brasil” (Olson & Stoever, 2005, p. 632). In turn, the principals from Netcom Brasil include “Eduardo Giberto, chief technology officer; João de Paolo, the chief financial officer; and Sarah Mayer, a North American Networx attorney” (Olson & Stoever, 2005, p. 632). The agents of the two companies are “large shadow teams, including Brazilian attorneys” (Olson & Stoever, 2005, p. 633). Hence, the outcomes of their meetings depend on their capability to find a compromise between the requirements of the businesses under consideration.
Issues and Parties
The previous history of negotiations between Vendros Technologies and Netcom Brasil demonstrated the presence of content issues related to their partnership. First, the entities struggled to agree on technology ownership since the latter wanted unlimited intellectual property rights, whereas the former viewed this intention as a threat to their profitability (Olson & Stoever, 2005). Second, the conflict was connected to Netcom Brasil’s desire to have access to the software code, and Vendros viewed this claim as their prospective losses in the case if this information is transmitted to third parties in the future (Olson & Stoever, 2005). In this way, the financial aspect of the matter was of critical importance.
Third, this stance is confirmed by the following claims made by the two parties. Thus, Netcom Brasil’s vision of expansion through providing rights to subsidiaries was considered by Vendros to be related to their losses in the long run (Olson & Stoever, 2005). Fourth, there was a misunderstanding regarding operational guarantees as Vendros’ did not believe in Netcom Brasil’s capability to meet the deadlines, which the latter thought to be the lack of trust (Olson & Stoever, 2005). Fifth, the risks deriving from the currency instability presented another reason for disagreement because Netcom Brasil insisted on paying in reais, whereas Vendros did not make any other suggestions but rejected the idea on the basis of the impossibility of hedging (Olson & Stoever, 2005). The combination of the above content issues can be seen as the principal obstacle on the way to an agreement between the companies, and their representatives’ opinions are well-informed.
Interests For Each Side For Each Issue
Examining the underlying interests of each side concerning the identified issues can be beneficial for finding a compromise between their claims. From this point of view, Vendros’ position is determined by the company’s financial concerns since they are mostly oriented on the long-term profitability of this partnership. In addition, its representatives are worried about the technological aspect and software ownership as the scope of rights of Netcom Brasil under their agreement correlates with their capability to find other partners in the country. The same consideration applies to subsidiaries of Netcom Brasil who can potentially cooperate directly with Vendros. In turn, the interests of Netcom Brasil include the desire to gain as much control as possible over regular operations in order to remain competitive. Moreover, they encompass the belief in the sufficiency of resources opposed by the opinions of Vendros’ leaders. As for the currency, the conflict of interests is determined by the possible legal risks for Netcom Brasil and the intention of Vendros to lower the reais.
Vendros’ BATNA and Its Implications for Negotiations
The analysis above showed that the common ground for the companies’ partnership is the desire to receive profits while strictly following the deadlines and other requirements as per the contract. However, the risks for Vendros should be mitigated by developing the Best Alternative to a Negotiated Agreement (BATNA). This alternative course of action with regard to the specified conditions should be based on the changes in the schedule and, more specifically, the delay in the decision-making process. This solution will be advantageous for clarifying the situation with the currency and help negotiators consider the possibility of partnerships with other companies to compare the terms. For Vendros, the implications of BATNA in the course of the ongoing negotiations are connected to the failure to agree on the technological aspect of the matter. Thus, they can benefit from the opportunity to analyze the consequences of their cooperation with Netcom Brasil thoroughly.
Two Cultural Issues
The two cultural issues, which emerged during the negotiations between Vendors and Netcom Brasil, are connected to their principal differences in perceptions. First, the unpredictability of timing in organizing meetings was the main factor, which adversely affected the attitudes of the former’s representatives (Olson & Stoever, 2005). They struggled to accept this mode of communication, and the situation was complicated by the continuous change of participants from the side of Netcom Brasil (Olson & Stoever, 2005). Second, the varying practices of discussing matters negatively influenced the process. Thus, the employees from Vendors could not concentrate on the tasks at hand due to the comments of peripheral team members (Olson & Stoever, 2005). As a result, the productiveness of their work was limited, and the decisions were impossible to make.
The Rationale for Two Channels of Persuasion
Another way to positively affect the negotiations is using the channels of persuasion by Vendros’ leaders to promote their views on the appropriateness of the contract terms to the interests of both parties. First, they can emphasize their commitment to the partnership with Netcom Brasil and be consistent in their actions and suggestions, which are supposed to bring profits to each of them (Lewicki et al., 2014). The rationale for this step is the previous uncertainty of managers from Netcom Brasil in this area, which is one of the main obstacles to their willingness to negotiate the conditions. Second, it is critical to adopt an approach based on reciprocity, which, in this case, means to give way through cooperation by being the first party to compromise (Lewicki et al., 2014). This solution will help Vendros occupy a more favorable position in the meetings, resulting in the necessity for Netcom Brasil to follow their lead.
Four Recommendations Regarding Negotiations Practices
The conducted analysis allows making recommendations related to negotiation practices. They include using an appropriate negotiating strategy, reconciling the interests, ensuring the equal distribution of value, and setting limits. First, Vendros should adopt the collaborative approach with “a high priority for both the relationship and the outcome” to meet all participants’ needs (Lewicki et al., 2014, p. 16). Second, the company should emphasize the shared vision instead of highlighting the differences in perceptions during the discussion (Lewicki et al., 2014). Third, Vendros’ leaders should develop ways to distribute the profits concerning all the circumstances and implied risks (Lewicki et al., 2014). Fourth, it will be advantageous for Vendros to set limits to the negotiations in terms of the presence of only the persons making decisions or directly affected by them (Lewicki et al., 2014). Thus, following these guidelines will ensure the efficiency of communication.
Conclusion
In conclusion, resolving the conflicts between Vendros Technologies and Netcom Brasil is possible by considering their causes. As follows from the findings, they are related to financial matters, technology, operational guarantees, the definition of rights, and currency. Meanwhile, the shared interests are profitability and a long-term partnership. Therefore, the options are to take a break in negotiations or use the recommendations, according to which Vendros should enhance collaboration through developing a common vision, proper distribution of benefits, and setting limits.
References
Lewicki, R. J., Barry, B., & Saunders, D. M. (2014). Negotiation: Readings, exercises, and cases (7th ed.). McGraw-Hill Higher Education.
Olson, J. W., & Stoever, W. A. (2005). Vendros in Brazil: Negotiating an international technology transfer.Thunderbird International Business Review, 47(5), 627-638. Web.