Hatley is very impressed with these data and forecasts. Recently, however, the Korean auto company’s sales and market share have been declining, and she remains uneasy about having to deal with someone located halfway around the world. “If I don’t receive scheduled deliveries, whom do I call?” she asked one of her vice presidents. “Also, we don’t speak their language. If there is a major problem, how are we going to really communicate with each other? I like the proposal, and I’d take it if I were sure that we wouldn’t have communication problems. However, $50 million is a lot of money to invest. If a mistake is made, I’m going to lose a fortune. They did experience some problems last year, and their sales were off that year. Of course, if the South Koreans are right in their long-range forecasts and I have no major problems dealing with them, my return on investment is going to be almost 50 percent higher than it will be with the U.S. manufacturer.”
1. What specific types of communication problems might Hatley encounter in dealing with the South Koreans?
2. Can these communication problems be resolved, or are they insurmountable and will simply have to be tolerated?
3. Based on communication problems alone, should Hatley back away from the deal or proceed? Give your recommendation; then defend it.
4. What negotiation approaches might Hatley use if she wants to continue with the deal in order to increase her confidence that it will be successful?