Reconciling differences for a joint venture

By on / Business Negotiations

The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises.The following role simulation is a two-party, four-issue negotiation between representatives of two companies with different national and corporate cultures regarding a possible joint venture.

Scenario: MedDevice, a U.S.-based Fortune 500 company that manufactures high technology medical equipment, and Lee Medical Supply, a small Thailand-based company that distributes medical equipment in Southeast Asia, seek to conclude a joint venture. The CEOs have met and signed a Memorandum of Understanding. They have now instructed their subordinates (Pat Armstrong, the Director of International Strategic Market Research at MedDevice, and T.S. Lee, the Vice President and son of the owner of Lee Medical Supply) to conduct preliminary negotiations on four issues they consider central to the joint venture: decision making, staffing, profit distribution, and a conflict resolution mechanism.

MedDevice and Lee Medical Supply differ greatly in their corporate cultures, which are shaped by their national cultures and the demands of their respective industries. MedDevice, a publicly traded company in a highly regulated industry, is rules-oriented, efficient, structured, data driven, and merit-based. Lee Medical Supply, a family-owned and operated company, places a high value on relationships and family loyalty, and favors informal consensus arrangements over rules. The respective negotiators must develop a way for companies with such divergent cultures to work together.

Subjects: Joint ventures; cross-cultural negotiations; agent-principal tensions

Major Lessons:

  • Handling the challenges involved in preparing for and conducting cross-cultural negotiations.
  • Recognizing and dealing with divergent assumptions and perspectives.
  • Bridging cultural differences and communicating effectively across cultures.
  • Handling agent-principal tensions

Minimum Participants: 2 Preparation Time: 30 min. – 1 hour Negotiation Time: 90 min. – 2 hours Debriefing Time: 30 min. – 1 hour

Teacher’s Package (30 pages total) includes: Participant materials; Teaching Note

To purchase this role simulation, click here.

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