Adjusting international agreements in light of change

A case of assisted renegotiation

Research output: Contribution to journalArticle

Abstract

Set in the context of a conflict over a business agreement, this negotiation exercise explores the dynamics of two companies with resource asymmetries. These parties choose mediation to resolve their dispute. The dynamics of a large industrial corporation against the independent owner in the retail gas industry the main premise of the case. The role play activity highlights the difficulties of fulfilling obligations when there are changes occurring in the political and economical environment. Two parties, Global Gas Inc. (GGI) and Gas Station Janet (Mr. Tony Martinez) agree to remodel an existing gas station and build two more. Mr. Tony Martinez provided the land lots and he operates the gas stations under an exclusive relationship with GGI regarding branding of the gas station and supply of gas, lubricants and any other oil product for 15 years. GGI paid for the exclusive rights, the remodeling and construction of one gas station but GGI did not complete the original investment plan since they did not construct the third gas station as stated in the Mortgage Warranty Contract. GGI argues that the third station was only a project and that there was no actual commitment to build it. In addition, the original premises of the business plan have changed since the Government of Colon has frozen the price of gas for the last two years. Mr. Tony Martinez contends that GGI made a clear commitment in the Mortgage Warranty Contract and therefore they are subject to liabilities. The main incentive of reaching an agreement at this stage is that the parties will have control over the cost of the outcome; otherwise, they will be subjected to the cost uncertainty of the final arbitration. Several other concepts are illustrated including the effect of economic conditions on price, personal and emotional involvement in the negotiation, the creation of effective business partnerships and the contrast between distributive and integrative negotiation strategies. The mediator's role is crucial for building viable options and reaching a final agreement. The present case is a simulation of a conflict and its resolution via mediation and conciliation. This exercise consists in simulating the conciliatory meetings.

Original languageEnglish (US)
Pages (from-to)33-46
Number of pages14
JournalJournal of the International Academy for Case Studies
Volume16
Issue number1
StatePublished - 2010

Fingerprint

international agreement
mediation
commitment
gas industry
arbitration
role play
costs
asymmetry
liability
corporation
obligation
incentive
uncertainty
supply
simulation
resources
economics
International agreements
Renegotiation
Gas

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Education
  • Law

Cite this

@article{0b467c92f15e4380bb19bb76057aa7b9,
title = "Adjusting international agreements in light of change: A case of assisted renegotiation",
abstract = "Set in the context of a conflict over a business agreement, this negotiation exercise explores the dynamics of two companies with resource asymmetries. These parties choose mediation to resolve their dispute. The dynamics of a large industrial corporation against the independent owner in the retail gas industry the main premise of the case. The role play activity highlights the difficulties of fulfilling obligations when there are changes occurring in the political and economical environment. Two parties, Global Gas Inc. (GGI) and Gas Station Janet (Mr. Tony Martinez) agree to remodel an existing gas station and build two more. Mr. Tony Martinez provided the land lots and he operates the gas stations under an exclusive relationship with GGI regarding branding of the gas station and supply of gas, lubricants and any other oil product for 15 years. GGI paid for the exclusive rights, the remodeling and construction of one gas station but GGI did not complete the original investment plan since they did not construct the third gas station as stated in the Mortgage Warranty Contract. GGI argues that the third station was only a project and that there was no actual commitment to build it. In addition, the original premises of the business plan have changed since the Government of Colon has frozen the price of gas for the last two years. Mr. Tony Martinez contends that GGI made a clear commitment in the Mortgage Warranty Contract and therefore they are subject to liabilities. The main incentive of reaching an agreement at this stage is that the parties will have control over the cost of the outcome; otherwise, they will be subjected to the cost uncertainty of the final arbitration. Several other concepts are illustrated including the effect of economic conditions on price, personal and emotional involvement in the negotiation, the creation of effective business partnerships and the contrast between distributive and integrative negotiation strategies. The mediator's role is crucial for building viable options and reaching a final agreement. The present case is a simulation of a conflict and its resolution via mediation and conciliation. This exercise consists in simulating the conciliatory meetings.",
author = "Paul Esqueda and Ogden, {Denise T.}",
year = "2010",
language = "English (US)",
volume = "16",
pages = "33--46",
journal = "Journal of the International Academy for Case Studies",
issn = "1078-4950",
publisher = "Allied Academies",
number = "1",

}

TY - JOUR

T1 - Adjusting international agreements in light of change

T2 - A case of assisted renegotiation

AU - Esqueda, Paul

AU - Ogden, Denise T.

PY - 2010

Y1 - 2010

N2 - Set in the context of a conflict over a business agreement, this negotiation exercise explores the dynamics of two companies with resource asymmetries. These parties choose mediation to resolve their dispute. The dynamics of a large industrial corporation against the independent owner in the retail gas industry the main premise of the case. The role play activity highlights the difficulties of fulfilling obligations when there are changes occurring in the political and economical environment. Two parties, Global Gas Inc. (GGI) and Gas Station Janet (Mr. Tony Martinez) agree to remodel an existing gas station and build two more. Mr. Tony Martinez provided the land lots and he operates the gas stations under an exclusive relationship with GGI regarding branding of the gas station and supply of gas, lubricants and any other oil product for 15 years. GGI paid for the exclusive rights, the remodeling and construction of one gas station but GGI did not complete the original investment plan since they did not construct the third gas station as stated in the Mortgage Warranty Contract. GGI argues that the third station was only a project and that there was no actual commitment to build it. In addition, the original premises of the business plan have changed since the Government of Colon has frozen the price of gas for the last two years. Mr. Tony Martinez contends that GGI made a clear commitment in the Mortgage Warranty Contract and therefore they are subject to liabilities. The main incentive of reaching an agreement at this stage is that the parties will have control over the cost of the outcome; otherwise, they will be subjected to the cost uncertainty of the final arbitration. Several other concepts are illustrated including the effect of economic conditions on price, personal and emotional involvement in the negotiation, the creation of effective business partnerships and the contrast between distributive and integrative negotiation strategies. The mediator's role is crucial for building viable options and reaching a final agreement. The present case is a simulation of a conflict and its resolution via mediation and conciliation. This exercise consists in simulating the conciliatory meetings.

AB - Set in the context of a conflict over a business agreement, this negotiation exercise explores the dynamics of two companies with resource asymmetries. These parties choose mediation to resolve their dispute. The dynamics of a large industrial corporation against the independent owner in the retail gas industry the main premise of the case. The role play activity highlights the difficulties of fulfilling obligations when there are changes occurring in the political and economical environment. Two parties, Global Gas Inc. (GGI) and Gas Station Janet (Mr. Tony Martinez) agree to remodel an existing gas station and build two more. Mr. Tony Martinez provided the land lots and he operates the gas stations under an exclusive relationship with GGI regarding branding of the gas station and supply of gas, lubricants and any other oil product for 15 years. GGI paid for the exclusive rights, the remodeling and construction of one gas station but GGI did not complete the original investment plan since they did not construct the third gas station as stated in the Mortgage Warranty Contract. GGI argues that the third station was only a project and that there was no actual commitment to build it. In addition, the original premises of the business plan have changed since the Government of Colon has frozen the price of gas for the last two years. Mr. Tony Martinez contends that GGI made a clear commitment in the Mortgage Warranty Contract and therefore they are subject to liabilities. The main incentive of reaching an agreement at this stage is that the parties will have control over the cost of the outcome; otherwise, they will be subjected to the cost uncertainty of the final arbitration. Several other concepts are illustrated including the effect of economic conditions on price, personal and emotional involvement in the negotiation, the creation of effective business partnerships and the contrast between distributive and integrative negotiation strategies. The mediator's role is crucial for building viable options and reaching a final agreement. The present case is a simulation of a conflict and its resolution via mediation and conciliation. This exercise consists in simulating the conciliatory meetings.

UR - http://www.scopus.com/inward/record.url?scp=77953498793&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=77953498793&partnerID=8YFLogxK

M3 - Article

VL - 16

SP - 33

EP - 46

JO - Journal of the International Academy for Case Studies

JF - Journal of the International Academy for Case Studies

SN - 1078-4950

IS - 1

ER -