fins. f oreign i nvestment n egotiation s imulation
TRANSCRIPT
FIN
S
FFOREIGN OREIGN
IINVESTMENTNVESTMENT NNEGOTIATION EGOTIATION
SSIMULATIONIMULATION
BRIEFING AGENDA Overview of FINS projectOverview of FINS project Key issuesKey issues Potential negotiation relationshipsPotential negotiation relationships Assignment / discussion of rolesAssignment / discussion of roles Negotiation processNegotiation process Graded assignmentsGraded assignments FINS ScheduleFINS Schedule
TEAM ASSIGNMENTS
MNCsMNCs Megatronics Megatronics EuroDataEuroData Tanaka Tanaka
Local FirmsLocal Firms TropimaticsTropimatics SystropSystrop ElectroParadysElectroParadys ParaInfoParaInfo
East TropicaliaEast Tropicalia West TropicaliaWest Tropicalia ParadisoParadiso
GovernmentsGovernments
MNCs: Megatronics, Tanaka, EuroData
Invest in emerging markets?Invest in emerging markets? International strategyInternational strategy Entry mode: Risk, resource, control trade-Entry mode: Risk, resource, control trade-
offsoffs Type of plant, finished product vs. Type of plant, finished product vs.
components components Bargaining power vs. local firms, govt.Bargaining power vs. local firms, govt.
LOCAL FIRMS:ParaInfo, SysTrop, TropiMatics, ElectroParadys
Enter industry?Enter industry? Industry entry mode: alone, JV, SOE?Industry entry mode: alone, JV, SOE? How to facilitate MNCs entry into countryHow to facilitate MNCs entry into country Access to technologyAccess to technology Government supportGovernment support Bargaining power vs. MNCs, govt.Bargaining power vs. MNCs, govt.
GOVERNMENTs: Paradiso, East Tropicalia, West Tropicalia
Policies for industry structure, accessPolicies for industry structure, access Economic integrationEconomic integration Favorable aspects of FDIFavorable aspects of FDI
LaborLabor High technologyHigh technology TaxesTaxes Imports vs. exportsImports vs. exports
Unfavorable aspects of FDIUnfavorable aspects of FDI DependenceDependence Low technologyLow technology
FINS Intl. Strategy and Entry Mode
North AmericaNorth America
Country of TropicaliaCountry of TropicaliaCountry of ParadisoCountry of Paradiso
TanakaTanaka EuropeEurope
Electro-Electro-ParadysParadys
ParaInfoParaInfo
SysTropSysTrop
TropiMaticsTropiMatics
Entry Mode Decision Matrix
Hi
Lo
HiLo
Str
ateg
ic I
mpo
rtan
ce
Str
ateg
ic I
mpo
rtan
ce
of C
ount
ryof
Cou
ntry
Stand-alone AttractivenessStand-alone Attractivenessof Countryof Country
Lo
Hi
Resource
s,
Resource
s,
Control,
Control,
RiskRisk
Entry Mode Decision Framework
Licensing
Exporting Intermediaries
Direct
Joint Venture
Wholly-owned Subsidiary
ControlControl ResourcesResources RiskRisk Dissem. LowLow LowLowLowLow
HighHigh HighHighHighHigh Low
High
Potential Negotiation Relationships
MNC1
Local Firma
GovernmentX
MNC2
Local Firmb
GovernmentY
INITIAL CONTACT Get Yahoo! or Hotmail e-mail account
e.g., [email protected] Send e-mail address to [email protected] ASAP
Public Statements (required via MGT 610 LISTSERV)
1. Team Name/Role
2. Team Members
3. Contact Information
4. Advertisements/RFP’s (optional)
Private RFP’s and Solicitations (optional)
Direct contact between players
Written Reports and Briefs Pre-Negotiation Strategy ReportPre-Negotiation Strategy Report
Due Mon., APR 4Due Mon., APR 4 Post-Negotiation ReportsPost-Negotiation Reports
1.1. Entry Mode & Strategy ReportEntry Mode & Strategy Report
2.2. Transaction (Non-transaction) ReportTransaction (Non-transaction) Report
3.3. Negotiation Process and Outcomes ReportNegotiation Process and Outcomes Report Due Monday, APR 11Due Monday, APR 11
Pre-Negotiation Strategy Report Intended End-Game Position Intended End-Game Position (~2-3 pages)(~2-3 pages)
Details about desired Details about desired entry modeentry mode and and international international strategystrategy – or – or policy/economic objectivespolicy/economic objectives and and policy specificspolicy specifics
Negotiation Game Plan Negotiation Game Plan (~1-2 pages)(~1-2 pages) Key parties Key parties Issue prioritiesIssue priorities Process strategies/tacticsProcess strategies/tactics
Internal Decision Process Internal Decision Process (~1/2 page)(~1/2 page) Authority, information processing, decision-Authority, information processing, decision-
makingmaking Key Contingencies Key Contingencies (~1/2 page)(~1/2 page)
Alternatives, fall-backs, last resort, etc.Alternatives, fall-backs, last resort, etc.
Post-Negotiation Reports
Entry Mode & Strategy ReportEntry Mode & Strategy Report Transaction (Non-transaction) Report(s)Transaction (Non-transaction) Report(s) Negotiation Process and Outcome ReportNegotiation Process and Outcome Report
Post-Nego Strategy/Entry Report (5 pages of text MAX … unlimited appendix items)
Details of current/future situation and Details of current/future situation and actions regarding:actions regarding: Entry modeEntry mode International strategy and operationsInternational strategy and operations Organizational structureOrganizational structure (Government: Future policies package)(Government: Future policies package)
Make explicit use of these frameworksMake explicit use of these frameworks
Post-Negotiation Transaction Report(s) Agreements/Contracts Agreements/Contracts
Each multi-party “agreement” Each multi-party “agreement” (~1-3 pages) (~1-3 pages) Type and purpose of projectType and purpose of project Partners, ownership, structure, control, etc. Partners, ownership, structure, control, etc. Agreements on other key issues Agreements on other key issues
Non-Agreement Briefing Non-Agreement Briefing (~2-3 pages)(~2-3 pages)
Why no agreement?Why no agreement? Process and substantive barriers to agreementProcess and substantive barriers to agreement Future process and/or substantive alternativesFuture process and/or substantive alternatives
Post-Negotiation Process Report2-3 pages of text MAX … unlimited supporting documentation
Negotiation ProcessNegotiation Process Which parties?Which parties? TimelineTimeline
Negotiation Issues/PointsNegotiation Issues/Points What were they?What were they? Link to entry mode and/or international Link to entry mode and/or international
strategystrategy Negotiation strengths vs. weaknessesNegotiation strengths vs. weaknesses Negotiation issues won vs. lostNegotiation issues won vs. lost
Post-Negotiation Process Report (cont.)
Negotiation ContactNegotiation Contact Mode, frequency, and substanceMode, frequency, and substance Bilateral vs. multilateralBilateral vs. multilateral
DocumentationDocumentation Agenda, progress, commitments, unresolved Agenda, progress, commitments, unresolved
issues, process, etc.issues, process, etc. Use of Media/Press Use of Media/Press
Individual press releases, joint Individual press releases, joint communiqués, etc.communiqués, etc.
Negotiation Outcome Conclusions (1 page)
Governments Governments Influence of policy package on entry mode Influence of policy package on entry mode
and strategy?and strategy? MNCsMNCs
‘ ‘Intended’ versus ‘realized’ entry Intended’ versus ‘realized’ entry mode/strategy?mode/strategy?
Local FirmsLocal Firms ‘ ‘Intended’ versus ‘realized’ role in Intended’ versus ‘realized’ role in
facilitating MNCs local entry mode and facilitating MNCs local entry mode and their overall international strategy?their overall international strategy?
FINS CALENDARDate: Task:
MAR 31 (Thurs.) Negotiations Begin 8:00 a.m.
APR 4 (Mon.) Pre-Negotiation Reports Due by 5:00 p.m.
APR 11 (Mon.) Negotiations End Post-game In-class Debriefing Post-Negotiation Reports Due