Week 3 Case Study Pacific Oil Company

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The case study on Pacific Oil Company shows from beginning to end the role of power in the outcome of a negotiation. From the beginning, the problem that Pacific Oil Company faced as it reopened negotiations with Reliant Chemical Company was that they did not assert the power necessary to really end up with the outcome of the negotiation they were hoping for. The case study points out several factors that Pacific Oil Company is trying to achieve in the contract negotiations with Reliant Chemical company: the change to a surplus of VCM in the market, the possibility of Pacific Oil needing a supply of their own of VCM to produce their own PVC, and the start-up of several other companies in the production of VCM (Lewiski, n.d.). These factors really point out the problem faced by Pacific Oil Company. The factors were stacked against them, giving Reliant Chemical an inherent advantage, but Pacific Oil did not go into the negotiations with a real strategy: “After negotiators articulate goals, they move to the second element in the sequence: selecting and developing a strategy…the pattern or plan that integrates an organization’s major targets, policies, and action sequences into a cohesive whole” (Lewicki, Saunders, & Barry, 2011, p. 91).

It is understandable that the economy and all of the items previously listed were stacked against the Pacific Oil Company, but I think had Fontaine and Gaudin included in their year end contract review an overall strategic plan associated with addressing each factor, not only for Reliant Chemical, but for all of their consumers, they would have developed a priority for which items were more and less important, defined the limits of what they were willing to give up, and thought of some concessions to have in the ready to offer up during negotiations (Lewicki, Saunders, & Barry, 2011) . Instead, it seemed like Pacific Oil had the attitude that Reliant Chemical would stick with them based on the long standing relationship,...
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