Nora Sakari - Case Assignment Example | Topics and Well Written Essays - 750 words

Nora Sakari - Case - Assignment Example Owing to the smaller size of Sakari, it would expand and increase its market share. Nora is likely to furnish the JV with its long-term good working affiliation with Japanese associates. By entering into a JV with Nora, a larger company, Sakari would benefit from the JV through enhanced marketing capability, which would in turn reinforce its market position. As it appears, Sakari, even though smaller, is the best partner for Nora because it provides Nora with exactly what it needs and each have a working idea of the other because they have been negotiation partners. b) Nora-Sakari’s negotiations failure can be attributed to mutual unawareness about their respective cultures. There was strong opposition from negotiating camps from both Nora and Sakari. First, Sakari seems to have no trust on Nora’s objective of forming the JV as they insinuate that Nora would duplicate their technology, thus becoming a major rival in the market. Coupled with internal politics, the negotiation was deemed for failure. Second, there was a tussle regarding the split of equity ownership. Sakari proposed Equity split of 49% and 51% for Sakari and Nora respectively. On the contrary, Nora gave a counter proposal of 30% and 70% equity split for Sakari and Nora respectively. Third, Sakari proposed that it provides the JV with digital switch basic structure while Nora wanted the digital switch basic structure to be made from the JV Company in order to gain contact with the switching technology. Fourth, Sakari’s proposal for royalty payment was 5% of gross sales while Nora proposed 2% of net sales of the JV. Fifth, there was inconsistency on salaries and perks suggested by the two companies. Last, Nora and Sakari could not agree on where to resolve the negotiation stalemate. The failure to understand variations in national culture and organizational politics played a huge role