Question

In: Operations Management

It was 4pm in the afternoon of Friday, December 19th. Carol looked out of a 10th...

It was 4pm in the afternoon of Friday, December 19th. Carol looked out of a 10th floor window with a view of Paris. Her thoughts drifted away for a second, thinking about the traffic congestion ahead on the famous grand departs of the city, and what excuse she would find this time to give to her husband for being late again. However, she quickly refocused her mind on the small group of people in the meeting room. She looked at the VP of purchasing of Renault Nissan Alliance, together with his Japanese counterpart at the other end of the conference table, and laughed to herself about the complicated relationship she had developed with them over the years. Everyone knew that the stakes were high. Depending on how the negotiations proceeded, it was possible that a US-based company would take over the business from a deeply infringed French supplier and for an amount of money too big to imagine. This was the moment Carol was waiting for...for 2 years. It wasn't easy, especially for a woman, to get where she was. Charlotte realized that her status as an outlier-someone who didn't fit the mold-helped her immeasurably. While she was fluent in French and familiar with Japanese traditions, her appearance bewildered most in the male-dominated automotive industry; they were not sure how to handle her combination of nearly 6' with a sporty engineering style, friendly demeanor, and non threatening smile. Over the years, she survived all kinds of tough negotiations with a kaleidoscope of raw male emotions from men of all nationalities by always staying focused on the content and delivery of customer service. Her ability to think 3 steps ahead and respond more quickly than the competition, combined with her tenacity and professionalism, was rare-regardless of gender. This positioned her favorably at the negotiating table. In fact, because of her track record of winning big business for her company over the last 15 years, Carol's management willingly provided her the support and resources that were necessary throughout the typically complicated and lengthy negotiation processes around the glob. By now, her team had delivered 12 months work of 3D drawings, new plant layouts, and a complete new concept, with intellectual knowledge that was difficult to protect. She also knew she could not go back and ask for another bucket of money without a clear contract in her hands. But strangely enough, the closeness of the mega deal did not deliver the adrenaline rush she would normally encounter in this stage. She actually felt like not wanting to win the game...and suddenly she realized that months and months of sleeping only 5 hours a night had brought her to this stage of indifference. On top of that, her French boss, an old school manager with responsibility for the whole division- had decided to join the negotiations. Carol knew he wanted to dominate the meeting. He was new in his role and he wanted to rack up risk-free success stories to support his global career within a rather American culture while keeping his French ego intact in front of the customer. What this customer was unaware of, however, was that only an hour ago, he called Charlotte in a panic after having seen last-minute changes in a business case worth several million dollars. he would not sign off and considered walking away from the deal. At that moment, Takahashi-san started to speak. Instantly, Carol knew something was wrong. It would be the first time in 2 years since the negotiations began that he would open the meeting... 2 hours later, while stuck in traffic in some boulevard, Carol revisited her options. Xmas holiday was supposed to start at this moment. Her customer had left already for either Marseille or Tokyo. Her boss was clear in his message: "0 support." Her team desperately needed a break. Her husband would ban her computer from the kitchen table. The US headquarters would certainly not be in favor of releasing another budget. Her rational mind told her that nothing was lost; she knew the financials and business risks by heart and she needed to spend time with the team to develop a roadmap to profitability. her customer wanted to get the maximum out of the deal and did not realize that his key supplier was ready to walk away from this major strategic business due to exhaustion and potential intellectual property risks. The customer's explanation was simple and took only 10 mins. Although Carol's company was certainly the preferred supplier, it was still not decided at the board level that Renault Nissan Alliance was ready for such a major strategic shift. More time was needed to reflect. As price and product design were almost equal between the 2 suppliers (new and incumbent one) it was difficult.

Answer the following questions:

1. What should Carol do in the next 2 (holiday) weeks in order to save the business for the company? She had already invested 2 years of work and saw a real potential to win. Yet, she was testing the limits of her marriage, her own hardiness, and her role as a leader and caretaker of an exhausted team.

2. What info would you need to make this decision? Where would you get it?

3. What are the potential implications of Carol moving forward vs stopping at this point? Realize that the decision was not in her hands, rather it rested with the board.

4. How do you keep acquisition teams and sponsors motivated, energized and focused in such a long negotiation processes?

5. How do you build the necessary trust between all stakeholders knowing that your customer is in a position to provide your complete competitive edge to your key competition.

Solutions

Expert Solution

1. Carol should try to realistically understand customer's view point of Intellectual property risk and their organisational culture of taking no risk. She should try to come up with suggestions that are more coercive by creating a mutual understanding than imposing through facts and figures that her team has been involved in creating since long time. She should maintain a balance by giving importance to others viewpoints and be a good listener encouraging others to come up with their doubts before clarifying them.

2. The info required to make this decision is the exact proposal that Carol's company was making in the negotiation process, the competitor information and to understand the differences and reason for changing suppliers by Renault Nissan.

3. The potential implications of Carol moving forward Vs stopping at this time will be a loss as she and her team has been working on this proposal since a very long time. It will show that she's not determined and herself not convinced about the benefits of the deal and hence is withdrawing from the situation though she's convinced that her firm's proposal is better.

4. The acquisition teams and sponsors can be motivated, energized and focused in such a long negotiation processes by making their beliefs strong about the merits of their work. The teams need to be optimistic and have faith on their work so that they can confidently work with the other teams and do not lose hope to win the process if it is stretching over a long period. Their faith in the work and trying to build an understanding with their clients to put their arguments more confidently will help them through the process.


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