Case Analysis: Tactics Of The Pacific Oil Company

In 1979, the Pacific Oil Company began its relationship with the Reliant Corporation, an association of immense consequence for both organizations. Lewicki chronicled this case in Lewicki, Saunders, and Barry (2010, pp. 582-609). Two multinational industrial giants, these companies had much to gain through a contract for the sale of vinyl chloride monomer from the Pacific Oil Company (or simply Pacific) to the Reliant Corporation (or simply Reliant). When representatives from the companies went to renegotiate the contract in 1984, a series of arduous deliberations started that would last for two years and culminated in an impasse for Pacific’s management. This paper reviews those deliberations before analyzing the negotiation styles of each company’s representatives and finally making a recommendation for Pacific Oil Company’s negotiators.
Background
Founded in 1902, the Pacific Oil Company rose to great acclaim …show more content…
Pacific Oil Company …show more content…
Over and over again, he gave into arguments without pushing back and making commensurate demands. Despite working for the leading manufacturer of petrochemicals in the world, Fontaine and Guadin negotiated like despirate salespeople, ceding power at every turn, and placed themselves in a position of weakness at the bargaining table. Furthermore, they did not identify the BATNA (best alternative to a negotiated agreement), which caused them to fall headfirst into renegotiations with Reliant without a plausible backdoor should things fall apart, thus reducing their power (Lewicki, Barry, & Saunders, 2011). Now, they are so afraid of losing a customer and botching the deal that he is willing to make a decision out of