CIPLA is anxious to have some basic research conducted for them. Everyone in the company has agreed on the need and knows that they cannot get the work done within the company. CIPLA neither has the people (expertise) nor the time. The research will require three years to do correctly.

The best people are in Dr. Sanjay's department at the National University. After extensive preliminary discussion, CIPLA has sent them a detailed outline several weeks ago. Sanjay has subsequently quoted a price of < 45 lakhs for the research work, which is approximately R 15 lakhs more than CIPLA have budgeted. Sanjay also want to reopen negotiations after the second year in case there are 'unanticipated' expenses.

Since receiving the proposal, CIPLA had two meetings with Sanjay. CIPLA explained in detail about their limitations and asked them to bring the costs down. Sanjay has made some very small concessions but none on the overall number. Essentially their position is. "If you want the work done in three years, that's the price." If CIPLA can stretch out the time, Sanjay can do something on price.

CIPLA pretty well know that's an unrealistic option- the company need this work done as fast as possible. Everyone in the company wants Sanjay to do the research; he is the acknowledged expert in the field. No one is in his league. CIPLA don't have any options and they also don't have R 45 lakhs.

A.What problems are faced by CIPLA? [2]

B. Identify the type of dimensions of bargaining in the above caselet. Provide justifications for your answer. [3]

C.Would you negotiate if you were Sanjay? Why or why not, defend your answer with justifications. [3]