Coordinator:
This case study reflects a situation where a german tourist resort developer, Abentauer Urlaub,
wishes to construct a vacation resort in the African country Zanir.
Zanir is a poor country where the people are divided into two in regards of western tourism. The
representative must bear this in mind for the negotiation.
It is standard for the German developer to own 100% of a resort but expect the Zanirian
representatives to demand some form of ownership of the resort. In a case like this there will be
multiple complications, but the main points of this negotiation will consist of construction of
infrastructure and water supply, which possibly will lead to a conclusion of the question of
ownership.
A representative from Abentaur Urlaub has taken a flight to Zanir to meet their representative and
the negotiation will begin.
Representative Zanir:
Welcome to Zanir. How was your flight?
Representative Abentaur Urlaub
Thank you, the trip went well, and might I just add; what a beautiful country this is. To show our
gratitude and the excitement we have for the common future and doing business with you, I have
brought you a gift.
Coordinator:
The Zanir representative becomes very happy for the gift, which is a German football shirt. This is
an example of small talk, which has the purpose of relaxing the atmosphere, cement a friendship
and might Develop creative ideas.
Representative Zanir:
As talked about, you want to purchase one square kilometer parcel of land and the price for this is
15. million euros. we would like to take part of the ownership by owning 51% of the resort and of
course pay for the share by ceding this one kilometer as your resort site. In other words, we will
remove the entire cost of 15 mio. euros from your hands and you will own 49% of the resort.
Representative Abentaur Urlaub
I hear what you say, and this is a very important topic for both parties which we definitely need to
discuss. We, as a company is used to own 100% of the resorts we buy, why giving up 51% of the
ownership sounds like a lot, but if you don’t mind, we would like to discuss another of point of
interests beforehand. Is this okay?
Representative Zanir:
No problem. We can return to this matter later.
Coordinator:
The Abentaur Urlaub Representative has caught an insight and interest from the other party
regarding ownership and will keep it in mind for the rest of the negotiation.
Representative Abentaur Urlaub
We would like to discuss the matter of infrastructure, as it is a necessity for the resort to succeed.
We are going to cover all costs of roads surrounding the resort, but for the resort to be successful,
we would like to see the general infrastructure in Zanir to be at the same standard - especially the
roads from the Airport to the resort. This is a necessity if tourists are to visit the resort, and we
believe you should cover those costs.
Representative Zanir:
Yes, we understand that a road would be crucial, but we believe that it should be the responsibility
of the resort to pay for its construction.
Representative Abentaur Urlaub
I understand what you’re saying, but it will be difficult for us to cover those expenses on top of the
rest. But if possible, perhaps we can meet somewhere halfway and split the costs of the road?
Representative Zanir:
I understand the value of cost reduction, but we have already offered to give you the land worth 15
million for constructing the resort. The money you will save would be more than enough to cover
the construction of a road from the airport.
Representative Abentaur Urlaub
We have not agreed to any of that yet, but we’ll keep it in mind for further discussion.
Coordinator:
The two representatives take a needed break to consider what has been talked about. They meet
again the following day.
Representative Zanir:
Thank you for the meeting yesterday. We have thought about your proposition, and we are willing
to pay half of the infrastructural costs of the road if, however, you will have to build a sea water
desalinization plant. We believe it is our common interest for the general functionality of the resort.
If we can agree on this, it will be a great foundation for the rest of our talk.
Representative Abentaur Urlaub
Just to make sure that I understand what you are saying. You are willing to pay 50% of
infrastructural costs adding up to 1,5 mio. Euros, if we are to build the water desalinization plant by
ourselves. Is that correct?
Representative Zanir:
Yes, exactly.
Coordinator
We have just seen an example of paraphrasing.
Paraphrasing gives the other party the felling that you have listened, and it is a way to check if you
have understood.
Representative Abentaur Urlaub
Thank you for the offer. Since you have brought up the dilemma of the water desalinization plant, I
think it is important do discuss the matter of the ownership before we talk about this topic. As stated
yesterday, we usually own 100% of the resort, and while we appreciate your offer of giving us the
land on which to build it, we can not see it financially benefitting us considering a 51% profit loss.
But we are again willing to compromise. We know that the zaniarian delegation is split and
approximately 50% of your population fears being exploited by us. Therefore – we would like to
make a very rare offer, to show good will and appreciation of you and your people, we would like
to offer you a 20% ownership and we split the cost of the land accordingly.
We believe for this deal to be fair, that you pay 50% of the water desalinization plant and then we
will cover the other 50%, like we’re already agreed upon with the road.
Representative Zanir:
Thank you for the offer and thank you for having the people of Zanir in your consideration as well.
To sum up the entire negotiation of today and yesterday, is it correct understood that you would like
us to split the cost of the road and the water desalinization plant 50/50? And in addition to this you
will have 80% of the ownership of the land and we will have 20% And due to this, you are paying
80% of the 15 mio euros and we will cover the remaining 20%?
Representative Abentaur Urlaub
Yes, this is correct. We believe this deal would benefit the both of us and we are really trying to see
it from your perspective, by providing shared ownership which we believe will result in a win-win
situation.
Representative Zanir:
I would like to thank you a lot for your offer and hospitality. At this current point, I am not in a
position where I can make this final call, without discussing it with my associates – but we are,
however, very keen on finding a solution, and we are somewhat content with the current ownershipmodel. So my proposal is that we schedule another meeting in a few days, where I will have the
required authority to make the deal.
Coordinator
To summarize this negotiation, the two parties both have an interest in finding a solution and are
willing to compromise to meet the needs of each other. The strategy for the first day was to feel out
the other party, where the Zanir representative gives up their main interest early on, which then
prodded the Abenteuer representative to change strategy for the next day to something more
empathetic.
A resolution has not been reached yet, but the seeds have been sown for the next meeting, where a
resolution hopefully will be reached.