This paper aims to examine the setting for cross-cultural renegotiations between Dell and the RS State Government and to propose how Dell should prepare for and move forward with the new counterpart to improve the bargaining power while facing fundamental changes in the political and ideological negotiation environment.
Table of Contents
- 1. EXTERNAL CONTEXT
- 2. RESEARCH QUESTION
- 3. NEGOTIATION ANALYSIS
- 3.1 PARTIES, INTERESTS AND RELATIONSHIPS
- 3.2 NATURE AND CONTENT OF NEGOTIATIONS
- 3.3 POWER ANALYSIS
Objectives and Key Themes
This paper analyzes the renegotiation between Dell and the Rio Grande do Sul (RS) State Government in Brazil following a change in government. The objective is to examine the cross-cultural renegotiation setting and propose strategies for Dell to improve its bargaining power in a fundamentally altered political and ideological environment.
- Cross-cultural negotiation in a changing political landscape
- Balancing substantive and relationship interests in international business negotiations
- The impact of political ideology on FDI negotiations
- Power dynamics in international business negotiations
- Strategies for improving bargaining power in challenging negotiations
Chapter Summaries
1. EXTERNAL CONTEXT: This chapter sets the stage for the negotiation case study by introducing Dell's expansion strategy into Latin America, focusing on Brazil. It details Dell's initial successful negotiations with the previous RS State government, secured through significant tax breaks and favorable bank loans. The chapter then introduces the pivotal shift in the political landscape with the election of Governor Olívio Dutra, a socialist who opposes such incentives, leading to the nullification of Dell's contract and setting the scene for the renegotiation process. The chapter highlights the "Guerra Fiscal" (tax war) between Brazilian states and the pressure faced by Dutra after the failed renegotiation with Ford.
2. RESEARCH QUESTION: This section succinctly outlines the central research question driving the analysis: to examine the setting for cross-cultural renegotiations between Dell and the RS State Government and to propose how Dell should prepare for and move forward with the new counterpart to improve its bargaining power while facing fundamental changes in the political and ideological negotiation environment.
3. NEGOTIATION ANALYSIS: This section provides a detailed analysis of the negotiation process, broken down into subsections focusing on parties, interests, and relationships; the nature and content of negotiations; and a power analysis. 3.1 details the interests of each party, including Dell's goals of establishing manufacturing and a long-term relationship with the Brazilian government, and Dutra's diverse interests balancing socialistic ideals with political survival. Key intermediaries like Pólo-RS and SEDAI are also highlighted. 3.2 analyzes the negotiation's integrative nature initially and explores the bargaining mix, emphasizing the potential for trade-offs and creative solutions, while acknowledging the importance of cultural considerations (e.g., Brazil's honor culture). Finally, 3.3 examines Dell's power position, particularly its strong Best Alternative To a Negotiated Agreement (BATNA) and its relationship-based power, highlighting the pressure on the RS State Government from the media and public opinion.
Keywords
International negotiations, cross-cultural negotiation, foreign direct investment (FDI), Brazil, political risk, power dynamics, bargaining power, tax incentives, socialist government, relationship building, Mercosul, Guerra Fiscal, best alternative to a negotiated agreement (BATNA), integrative negotiation.
Dell and the Rio Grande do Sul State Government: A Cross-Cultural Renegotiation Case Study - FAQ
What is the main topic of this paper?
This paper analyzes a cross-cultural renegotiation between Dell and the Rio Grande do Sul (RS) State Government in Brazil following a change in government. It examines the renegotiation setting and proposes strategies for Dell to improve its bargaining power in a changed political and ideological environment.
What are the key themes explored in this case study?
Key themes include cross-cultural negotiation in a changing political landscape; balancing substantive and relationship interests in international business negotiations; the impact of political ideology on FDI negotiations; power dynamics in international business negotiations; and strategies for improving bargaining power in challenging negotiations.
What is the central research question?
The central research question is: How can Dell prepare for and successfully renegotiate with the new RS State Government to improve its bargaining power, considering fundamental changes in the political and ideological negotiation environment?
What is the context surrounding the renegotiation?
The renegotiation stems from a change in government in RS, Brazil. The previous government offered Dell significant tax breaks and favorable loans. The new socialist governor, Olívio Dutra, opposed these incentives, nullifying Dell's contract. This occurred within the context of a "Guerra Fiscal" (tax war) between Brazilian states.
Who are the key parties involved in the negotiation?
Key parties include Dell, the RS State Government (specifically Governor Olívio Dutra), and intermediaries like Pólo-RS and SEDAI. The interests of each party are analyzed, considering Dell's business goals and Dutra's balancing act between socialist ideals and political survival.
How is the negotiation process analyzed?
The negotiation process is analyzed through three subsections: Parties, Interests, and Relationships; Nature and Content of Negotiations; and Power Analysis. The analysis considers the integrative nature of the negotiation, the bargaining mix, potential trade-offs, cultural considerations (Brazil's honor culture), and Dell's power position, including its BATNA (Best Alternative To a Negotiated Agreement).
What is Dell's bargaining power and BATNA?
Dell's bargaining power is analyzed, highlighting its strong BATNA and its relationship-based power. The pressure on the RS State Government from the media and public opinion is also considered.
What are the key takeaways or conclusions of the analysis?
The analysis provides insights into the complexities of cross-cultural negotiations in politically volatile environments, offering strategies for improving bargaining power in such settings. It emphasizes the importance of understanding the political and ideological context, balancing substantive and relationship interests, and leveraging various power dynamics.
What are the keywords associated with this case study?
Keywords include: International negotiations, cross-cultural negotiation, foreign direct investment (FDI), Brazil, political risk, power dynamics, bargaining power, tax incentives, socialist government, relationship building, Mercosul, Guerra Fiscal, best alternative to a negotiated agreement (BATNA), integrative negotiation.
What are the chapter summaries?
The document provides summaries for each chapter: Chapter 1 (External Context) sets the stage; Chapter 2 (Research Question) outlines the central question; and Chapter 3 (Negotiation Analysis) provides a detailed breakdown of the negotiation process.
- Quote paper
- Konstantin Wink (Author), 2018, Dell’s Dilemma in Brazil. Negotiating at the State Level. A Negotiation Case Study Analysis, Munich, GRIN Verlag, https://www.grin.com/document/448500
