Nora Sakari
Nora Sakari case analysis
1. Why have the negotiations so far failed to result in an agreement? Is the formation of the JV between Nora and Sakari the best option for both companies to achieve their respective objectives?
Ans. Part 1: Negotiations to date between Nora and Sakari have failed mainly due to a mutual ignorance of one another's cultural norms. One of the key reasons for failed to result in an agreement is that there is huge gap between what Nora and Sakari can sacrifice to successfully negotiate the contract with each other. Following are some example proving how far they are from the real contract.
Sakari proposed an equity split in the Joint Venture (JV) Company of 49 percent for Sakari and 51 percent for Nora. Whereas, Nora proposed a 30 percent Sakari and 70 percent Nora Split.
Sakari proposed to provide the JV Company with the basic structure of the digital switch where by the JV Company would assemble the switching exchanges at the JV plant and subsequently install the exchanges in designated locations identified by TMB. On the other hand, Nora proposed that the basic structure of the switch be developed at the JV Company in order to access the root of the switching technology.
Sakari proposed a royalty payment of five percent of the JV gross sales while Nora Proposed a payment of two percent of net sales.
Besides this, there is a huge gap in the Sakari’s expected salaries and perks from the JV Company and what Nora willing to provide. And finally both Nora and Sakari disagreed on the location for the dispute resolution.
In addition to this, lack of preparation and lack of understanding on the differences due to national culture is another factor for failed negotiations.
Ans. Part 2: While talking about the Nora’s point of view, to ensure compliance with the terms of the TMB contract, joint venture negotiations with Sakari must be successfully concluded. Nora is looking to
1. Why have the negotiations so far failed to result in an agreement? Is the formation of the JV between Nora and Sakari the best option for both companies to achieve their respective objectives?
Ans. Part 1: Negotiations to date between Nora and Sakari have failed mainly due to a mutual ignorance of one another's cultural norms. One of the key reasons for failed to result in an agreement is that there is huge gap between what Nora and Sakari can sacrifice to successfully negotiate the contract with each other. Following are some example proving how far they are from the real contract.
Sakari proposed an equity split in the Joint Venture (JV) Company of 49 percent for Sakari and 51 percent for Nora. Whereas, Nora proposed a 30 percent Sakari and 70 percent Nora Split.
Sakari proposed to provide the JV Company with the basic structure of the digital switch where by the JV Company would assemble the switching exchanges at the JV plant and subsequently install the exchanges in designated locations identified by TMB. On the other hand, Nora proposed that the basic structure of the switch be developed at the JV Company in order to access the root of the switching technology.
Sakari proposed a royalty payment of five percent of the JV gross sales while Nora Proposed a payment of two percent of net sales.
Besides this, there is a huge gap in the Sakari’s expected salaries and perks from the JV Company and what Nora willing to provide. And finally both Nora and Sakari disagreed on the location for the dispute resolution.
In addition to this, lack of preparation and lack of understanding on the differences due to national culture is another factor for failed negotiations.
Ans. Part 2: While talking about the Nora’s point of view, to ensure compliance with the terms of the TMB contract, joint venture negotiations with Sakari must be successfully concluded. Nora is looking to