Business Negotiation Scenario (Hr)

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Negotiation Analysis Case
By: Tae Hoon, Min, and Lin

Business Negotiation Scenario
David (age 58) is in charge of Southeast Asia for an investment company, Wells Fargo as a managing director. The firm is not performing well and David feels that he is at risk. He decides to negotiate an early retirement package with his company. His highest earnings have been $750,000. When David is preparing to negotiate an early retirement package with his company, he gets an email from the chairman of Allianz. This email includes an offer of managing director position which is in charge of Southeast Asia with offer of a $300,000 base, plus potential, plus a reasonably attractive package of options. This direct manager position has been one of the longest running searches handled by a major recruiter. Allianz is trying to hire a person who has great work experiences as a managing director and who can successfully manage the Southeast Asia branch to bring maximum profit to the company.

David’s Alternatives:
1. Retire investment company, Wells Fargo with an early retirement package. * Early Retirement Package includes:
* Wells Fargo pays for the health insurances, which covers a monthly maximum amount of about $5,000. * Wells Fargo gives 1,000,000 company’s stock. (David was very successful with Allianz Life Pro+, which is one of the Wells Fargo life insurance products; brought huge profit to Wells Fargo.) * Wells Fargo gives 85% of his last salary every month. (It is 85% since David worked in Wells Fargo for more than 30 years.) 2. Accept Wells Fargo’s managing director position which is in charge of Southeast Asia branch. * Wells Fargo’s offers for managing director position:

* Wells Fargo gives $300,000 base, plus 500,000 company’s stock. * David must come up with one or more new financial products and bring profit to the company. * When the product is launched, Wells Fargo gives 35% of the profit earned from that product as a bonus.

Allianz’s Alternatives:
1. Allianz can hire David who has an ideal background, great experiences as managing director, demeanor and skill set for the assignment. Hiring David will cost less for the company than hiring Sam (age 48), who Allianz is considering to hire instead of David. A disadvantage of hiring David is that David is old and he will not be able to work for the company for a long time. 2. Allianz can hire Sam who used to work in Cisco as managing director of South America branch. Hiring Sam will cost more for the company than hiring David. Sam is younger than David; therefore Sam will be able to work in a company for a longer period than David. However, Cisco where Sam previously worked is in totally different industry than Allianz. David also has less work experience as managing director than David.

* Allianz’s offers for managing director position for Sam: * Allianz gives $500,000 base, plus 500,000 company’s stock. * David must come up with one or more new financial products and bring profit to the company. * When the product is launched, Wells Fargo gives 35% of the profit earned from that product as a bonus. There are four parties who exercise influence over the outcome of the negotiation; they are: David, Sam, Wells Fargo and Allianz. First of all, David is involved in everything that is going on in this die negotiation. David is the main in this negotiation scenario. Sam who Allianz is considering to hire instead of David is not directly involved in die negotiation. It’s because although David is competing against Sam with managing director position, David does not know who Sam is and who he is competing with for the position. Wells Fargo where David is currently working and preparing to get an early retirement package is directly somewhat involved in die negotiation. It’s because Wells Fargo is the one that is giving retirement package. Depends on how good the retirement package is it will definitely influence...
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