Teaching Cases

The Co-Op of forest industry Maderera Barinas (COPEMABA)
Date Published: 2017
Published By: The case centre
Authors:José Mayora
Product #: E317-0061-1


Abstract


The negotiation exercise described below is the simulation of a negotiation process that takes place in a context in which there is a restricted supply of wood products. Three actors participate: Cooperativa Maderera Barinas (COPEMABA), supplier of forest products; Sawmill Nazareno (ASENA) forest input processor and producer of sawn timber; Sindicato Carora (SINCAR) processor of forestry, chemical and steel inputs and diversified industrial producer. (1) For over 50 years, COPEMABA has been managing a concession granted by the State where it grows different timber species, one of which is the mamey, a tree that has the particularity of providing inputs to different activities Industrial and commercial. For technical reasons, COPEMABA is forced to cut down a batch of mamey trees equivalent to 500 units, which it puts on sale at a time when there is no offer of mamey in the market. This lot of trees will have a cost of USD700,000.00, an amount that will allow COPEMABA to cover the cost of cutting the 500 trees and reforesting 2,500.00 (according to the respective law, for each tree that has to be planted 5 ). On previous occasions, COPEMABA sold separately, and in the required quantities, the various components of the tree, (2) but in view of the cash flow restriction, it is offering the complete tree lot (500 trees included the components). ASENA and SINCAR, each separately, upon learning of the sale of the mameys lot, come to the offices of COPEMABA to buy those components of the lot of trees they require. COPEMABA informs that, on this occasion, they can not sell the lot separately. In both cases, the companies state that they do not have the budget to buy the entire lot, since each one has different and not exclusive needs. COPEMABA informs the Nazareno Sawmill that the Carora Union is also interested in a part of the lot and suggests that it agree with them so that between the two organizations they acquire the complete lot. Equal pointing makes Copemaba the Syndicate Carora. This suggestion is the one that forces the Nazareno Sawmill and the Carora Syndicate to sit at a table to negotiate the parts of the tree that each one needs and to provide the necessary budget to finally acquire the lot of mameyes. The problem faced by these companies is that, apparently, each of them requires the same amount of trees but no account with the sufficient budget to acquire them. In addition to the budgetary constraint, a certain negative antecedent (3) creates some distrust of ASENA in relation to SINCAR, in order to sit down and negotiate with them.

 

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Keywords: Negotiation; Negotiation analysis; Negotiated agreement; Negotiating multi-party; Negotiating teams; Negotiating relationship and emotions; Negotiation methods; Negotiation strategy; Negotiation theory
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