Pacific Oil Company Essay Example

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, and expense tied to the creation of the pipeline alone. This was a perspective not shared by Reliant Chemical, and I think the problem that ended up costing Pacific Oil so much at the negotiation table. It would seem that the types of negotiators each of our characters took on also had a fair part in the way the negotiations played out. Bhand (2010) discusses the four types of negotiators.

I don’t believe we see all four of he negotiation types displayed in this negotiation, but rather that Fontaine and Gaudin share the same negotiation technique while Hauptmann, and Zinnser take on very different methods to the negotiating. Let’s start with Fontaine and Gaudin. From the first visit between Gaudin and Hauptmann in December to the combined visit of Fontaine and Gaudin in March, Lewiski (n. d. ) points out the factors of the established relationship between Pacific Oil and Reliant Chemical, and the thought of Fontaine and Gaudin that the negotiations will be without any real problems.

This thought process, and the way it continues to drive the negotiation going forward falls into Bhand’s definition of a negotiator low on task orientation but high on relationship orientation. “They have a mindset that if the relationship with the other negotiator is

‘good’ then it will be easy to negotiate…rarely disagreeing with the other party, they want to please the other party by agreeing to most demands” (2010).

This behavior is displayed over and over again with Fontaine and Gaudin in that they do not disagree with any of the Reliant Chemical demands outright, but rather they take under consideration each request for review with other Pacific Oil officials, or for further analysis each request, and come back generally very close to what Reliant asked for to begin with. It seems throughout the negotiations that Fontaine and Gaudin put maintaining this relationship first and the terms that are agreed upon second. Hauptmann appears to have both low task as well as low relationship orientation (Bhand, 2010).

It is probably because of the relative newness of Hauptman in his role in the company when the negotiations start. Lewiski (n. d. ) tells that Hauptmann has only worked for Reliant Chemical for a few weeks. So, it goes to say that the relationship that Fontaine and Gaudin are banking on, Hauptmann knows only second hand from what he is told by his coworkers and of course by Fontaine and Gaudin. Hauptmann does not make many suggestion as to the terms that are to be included, but takes forward what he is told by Zinnser and others and then works with Hauptmann until a mutually agreed position is determined. …These negotiators don’t achieve much and don’t help the other party to achieve much either.

The negotiation quickly moves to a dead lock position and negotiators move away from the negotiation table” (Bhand). Many times over the course

of the negotiation timeline Hauptmann leaves Gaudin in a position to have to return for further discussion. I think the involvement of Hauptmann is a key factor in the downturn of the negotiation process for Pacific Oil Company.

Finally, there is Zinnser. He is what Bhand (2010) classifies as a negotiator that is high on task orientation but low on relationship orientation. They often make very high, often uncompromising, demands of the other party, with scant regard to the other party’s interest” (Bhand). Zinnser has determined what terms he wants to be contained in a contract for VCM, but it is apparent he doesn’t have much regard whether those terms come from the long standing relationship with Pacific Oil or not. In fact, in his first meeting, in March 1985, with Fontaine and Gaudin, Zinnser makes it known he wants a competitive formula price on the VCM, and he’s already been discussing prices with other companies preparing to come online.

He does this again later in the negotiations when discussing measuring methods at the pipeline. I think Zinnser’s tactics in negotiation more than anything else is what Fontaine and Gaudin were not prepared to take on when they came to the table to renegotiate the contract. Zinnser’s negotiation type combined with Hauptmann’s lack of commitment quickly took the power of the negotiations away from Fontaine and Gaudin, the reason the negotiations ended up being drawn out and not near the terms Pacific Oil Company would have like to see.

Frank Kelsey and how he would advise to Jean Fontaine is really a no-win position. Pacific Oil has already given up so many

concessions in the negotiation process, with Reliant continuing to drive for more, but at the same time, so much time and effort has been invested in the negotiation to make the wrong decision now could see the entire contract disintegrate completely; not to mention Jean Fontaine’s neck is now on the line to get this negotiation closed.

Therefore, I think what Frank Kelsey should advise is that they go to back to Reliant saying this is the last change we will make, and agree to a specific amount of VCM that Reliant Chemical can be allowed to resell. This way they don’t end up supplying Reliant Chemical a resale product, and they narrow the liability should any issues arise with the resold product, and linking it back to Pacific Oil.

I think prior to the agreement to allow resale, Pacific Oil needs to return to the negotiation table, state the terms that are contained and say this is our best and final offer. I fear if they don’t Zinnser and Hauptmann will have had time enough to come up with yet another point of contention which will continue to prevent the deal from closing. Pacific Oil needs to realize they need to put a stake in the ground, or no matter the investment, be willing to walk away.