USAuto’s negotiating team did not carefully identify AutoMex’s goals. USAuto’s goal was to reduce costs through utilizing AutoMex labor. AutoMex, by contrast, viewed USAuto as a source for developing its employees’ skill levels. USAuto’s negotiating team also approached entering the Mexican market similarly, unwilling to allow AutoMex access to the hybrid engine for AutoMex’s own production.
Both of these distributive approaches create win-lose situations and can lead to conflict, as compared to the win-win situations created by integrative negotiations (Kinicki & Kreitner, 2003, p. 504).
USAuto can develop intelligence on potential business relations to understand better others’ goals in negotiation settings.
“A distributive negotiation usually involves a single issue—a ‘fixed-pie’—in which one person gains at the expense of the other. For example, haggling over the price of a rug in a bazaar is a distributive negotiation,” (Kinicki & Kreitner, 2003, p. 71).
Instructions for Completing Table 1:
Begin by creating a list of the maximizing shareholder wealth concepts from your assigned text, articles, or other sources. Think about how each concept could have an impact on the current and future performance of Lester Electronics. In the context of the scenario, determine how the concept reflects an issue. Place the issue, and corresponding opportunity, in the table accordingly in columns 1 and 2. In column 3, identify the concept underlying the issue. Finally, in column 4, provide a specific citation referencing the concept. See Table 1 for an example from the USAuto scenario.
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