Question

In: Operations Management

The following conversation happened between a consultant hired by a major partner to investigate the financial...

The following conversation happened between a consultant hired by a major partner to investigate the financial matter of the music cafe that was started by him and his partner as a 65% and 35% shared venture respectively. The major partner after suffering a huge loss, is determined to take out his share or put limits on the place’s operations. However, the minor partner wants to convince him to keep the operations as they were and not close the partnership. Analyze the conversation and help us in understanding what might have gone wrong even before the minor partner was heard by the consultant keeping in mind the non-verbal modes and demonstrate the speaking skills of the minor partner and the consultant - what could they possibly have done before meeting considering the topic under discussion, to make up for whatever went wrong.                                                                  

Minor P: I want to be respectful here. I appreciate everything you’re trying to do, so hopefully we can find some common ground.

Consultant: I’d like that very much.

Minor P: Now I am ok with compromising on the menus, but the ‘GB’ has its own vibe, you know its own sound that has helped me in creating an environment for people to come together and enjoy music.

Consultant: And I’ve gone through months of your bookings and cross-referenced them to receipts. The bands I’m going to book have a significantly bigger draw.

Minor P: Connecting the music and sales especially during lunch, is a bit of a stretch don’t you think? Besides music is an experience, it’s not a statistic.

Consultant: We are pretty sure of our numbers.

Minor P: Ok, let’s at least talk about open-mic night, which we created to support local bands.

Consultant: It’s a no-go. People are coming to listen to their friends and aren’t spending money. This isn’t a charity.

Solutions

Expert Solution

Case Background:

Two partners came together to start a music cafe. Major Partner has 65% stake and minor has 35% stakes in the cafe. Due to downward spiral in the financial matters of the cafe Major partner hired a consultant to talk to minor partner and come to a conlcusion about improving the operations and hence financial matters at the cafe.

Observations about the conversation and the case:

1. Disconnect between Major and Minor stake holder in the cafe is quite apparent as the Major stakeholder is himself not talking to the minor stakeholder. Instead he has employed a consultant who is looking into the matter and speaking to minor stakeholder on Major stakeholder's behalf. This strategy is detrminental to partnership kind of businesses as both the partners in this case will become defensive and offensive for and towards each other's suggestions respectively.

2. The root cause of the financial problem is not known to Minor or Major stakeholder. Instead the consutant has brought up some data analysis and is basing his judgement/suggestion for improving business on the same.

3. The minor stakeholder seems to be emotionally driven. His intent is clear from the fact that he wants to give local bands a chance to flouris, karaoke nights etc. on the contrary the major stakeholder is least bothered about these concerns and wants to invite the bands that are popular so that they can pull in many more crowds.

There are certain other aspects of the case that went awry:

1. neither the consultant nor the minor stakeholder are ready to listen to each other's point. They seem to be in an interminable hurry to make their points across and move on or force the other party to concede to the conditions.

2. The consultant should have detailed out the problem to minor stakeholder along with few live examples and how the future prospects will change if the suggestions are followed.

3. The consultant should have mentioned the financial concerns in detail and tried to connect the emotional attachment of the minor stakeholder to the rationale of money / finance and why it is important for sustaining the business.

Most of the conversations or negotiations fail to produce teh desired results because of the failure of the parties to listen, empathise and try and create a win-win situation. The case is a clear example of such a situation where listening to the other party is absolutely missing or ignored.

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