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David Out-Negotiating Goliath

Case Incident 5

Organizational behavior
Presented to: Dr. Hesham Sadek
Prepared by: Mohamed Safwat Elhabiby ESLSCA, MIBA 35D November 2011


David Out-Negotiating Goliath

Problem definition
Negotiations between companies to reach self oriented goals are very well known to attain win-win situations, such negotiations are sometimes welcomed by the other party and sometimes not. In our case here, the problem is that Bristol-Myers Squibb (World Drug giant) went through negotiations with Apotex (Competitor) to let them delay the shipping of their competitive generic drug that is similar to their Bristol-Myers best selling drug in a way to let them continue their profits. The problem here mainly is that Britsol-Myers negotiations were not efficient enough and not well prepared such that they were asked to pay 60$ Million due to a clause added in the contract that requires them to pay Apotex that sum of money in case FTC rejected the deal. And because Bristol-Myers didnt do their homework well, they didnt realize that FTC wouldnt approve ever the noncompeting agreement the two parties were negotiating.

Justification for Problem Definition

As stated in the previous section, before starting any negotiation you should start doing your homework for collecting the facts for the subject youre negotiating. During this negotiation between Bristol-Myers Squibb, the negotiator didnt collect enough facts in addition to the fact that he didnt take the attorneys with him as a gesture of goodwill however this was a double-edged weapon. However, Dr.Sherman (Apotexs founder) made use of Dolans ignorance of the basic rules of FTC and gained in a Win-Lose situation a big sum of money from this negotiation.

List of Alternative course of action If Bristol-Myers were to reach good negotiations and reach their goal from the negotiation they should have taken the following steps; 1) Fact Finding: This is actually the most important step in negotiations; experienced negotiators have a difficult time describing how they prepare for negotiations, because they do right things automatically after learning by trial and error. Using fact finding Dolan could have easily observed that the Federal Trade Commission (FTC) wouldnt accept this and wouldnt have let this clause in the contract. 2) Dont trust the other party You dont have to build the relationship with the negotiations other party on trust because its normal that everyone is searching for his own benefits, thus if Dolan would have taken the attorneys with him he could have been able to prevent this legal fault in the contract. Evaluate Alternatives Regarding the list of alternatives, the first alternative is a mandatory and very efficient means of winning a negotiation and should be used all the time. Regarding the second alternative, its highly recommended that we take into account the nature of the negotiation before deciding either to trust or not the other party; in other ways, if the negotiation was to attain a good relationship with the other party through a win-win situation so it should be built on trust, however if the negotiation was

to attain a win-lose or a lose-lose situation where the relationship with the other party is not important (distributive bargaining) you should not put all your trust in the other party and take care in every step you are taking. Conclusion and Recommendation Negotiation strategies need to be developed by considering a whole host of factors that might have a powerful impact on our success. It is also wise to remember that our strategy has to be flexible and will need to be adjusted as the game plays itself out. We cannot know everything before we go into our first meeting, so we need to prepare to adjust our strategy and tactics, as the situations warps and changes shape. Flexibility is vital, but good preparation is essential. During the discussed negotiation some major faults were done leading to the failure of the negotiator because of not reaching his goals, this led to a severe loss for the company. We have to take care in all negotiations to do all our best to collect as much facts as possible before undergoing a negotiation and never put our trust in the other party.

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