1. Gashaw, Tirualem Awoke ID: 092sis13 Submitted to: Professor Jasper Kim
Chinese & European company water negotiation International Negotiation: Theory and Practice
Gashaw, Tirualem Awoke
ID: 092sis13
Submitted to:
Professor Jasper Kim

2. The case
03/06/2007

3. Contents Introduction Case briefs Final agreements Analysis
Good strategies
Bad strategies
Lessons and
Conclusion

4. Definition: Negotiation is
1. Introduction
Definition: Negotiation is
A field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things
Is a fact of life
Is a basic means of getting what we want from others
Two types of negotiations, soft and hard negotiation

5. Cont… Negotiation cab be done knowingly and unknowingly.
Strategies applied in the negotiation makes the whole process and the result effective.
Agreement may not be possible always because of conflict of interest.

6. 2. Case brief
The main issue
urban water supply system providing potable water to around one million people in china
Four sub issues: water charges, the demand for water, the formula to calculate annual water tariff revisions and the new company structure

7. Interest
HCL is to set up a joint venture with the municipality’s water company on a 3:1 ratio, and to operate the facilities on a twenty five-year contract by purchasing the facilities.
PAQ: to increase its investment in China and to have a contract with HCL to construct a water plant treatment plant for the system.

8. The BATNA (Best Alternative Trade Negotiation Agreement)
The agreement to discuss on the table
The better your BATNA, the greater your power.
BATNA is the backbone of negotiation

9. Final agreements
Both parties agreed on the following issues:
the municipality would not be in the joint venture,
inflation-adjusted tariff,
foreign exchange should represent less than 5% of investment and be used no more than 10 years and
shareholding structure was 3:1 with PAQ and HCL respectively.

10. 3. Analysis 3.1. Good aspects of this negotiation
information about other visitors who have the same interest with PAQ/Competator
PAQ create good environment by preparing dinner several times
Reduced the number of negotiators because Being too many in negotiation may delay the agreement or sometimes impossible because of several ideas coming from different directions
They goes from simple to complex issues

11. Cont….
3.2. Bad aspects of this negotiation
Failure in their first negotiation because of less preparation
There was intervention of ranking officials
Reduction of the number of participants
They spend too much time to reach in agreement; reduces efficiency.
They both did not understand each other
Communication problem, with out communication, no negotiation

12. Conclusion
The negotiation was fast for the second time due to enough preparation on the issues in both parties.
Both parties would learn from their previous experiences, will help them in the next negotiation and if they meet in other negotiations there might be no problem.
PAQ would show how they are trust people later after negotiation, because trust in negotiation is the very crucial factor.

13. Cont…
The number of issues raised was too many; they should discuss in different days to avoid confusion and mistake in decisions
Was generally successful negation
03/06/2007

14. The end!
Thank you