Consider the case study described below: Company A owns three hotels in the city of Athens, with a capacity of 100 double rooms each. The company has run into financial distress because its hotels are very old, have not been recently renovated and bookings are few despite the record number of visitors in Athens in the last 3 years. Company A is willing to renovate the hotels immediately so it can attract clientele before the summer season begins but there is no capital available. The company has available 2 business strategies, either apply for a very costly loan of 2 million euros that will enable the company just to break even for the next 20 years with negligible profit margins or partner with a Chinese construction company Company B has recently set up in Greece. The business proposal is the following: Company B will do all the necessary hotel renovation which can be of low, medium or high quality and cost 1m, 1,5m and 2 million respectively. Company B asks for 30% of the profits for low quality renovation, 40% for medium and 60% for high quality renovation for the next years. The prospects of the touristic sector are such that Company A will be able to make a net profit of 200.000-500.000 per year depending on the quality of the renovation. On top of this forecast, COMPANT B can increase profits by another 20% by partnering with a Chinese tour operator that can secure a flow of Chinese visitors to the hotel. In that case COMPANY B asks for 50% of the hotel profits coming from its partnership with the tour operator. The hotel market in Athens is saturated, competition is increasing and there is no much room for construction works beyond 2028. Moreover, due to high interest rates a crisis in the housing and construction market is looming. Company A is new in the Greek market and had no customers yet. You are the CEO of COMPANY A and have to decide about which business strategy to choose and your negotiation plan with COMPANY B.

Question 1 (25%) What are the issues of negotiation and the BATNAS of negotiators? Design your negotiation approach in advance. Choose between top down and bottom up approach. Justify your choice.

Question 2 (15%) List some common strengths and weaknesses of negotiators from your culture. You may use an appropriate table.

Question 3 (15%) Does culture matter at the above negotiation? Consider how it affects the negotiation. What do you take into account regarding culture e.g. language, expectations?

Question 4 (20%) Tactics means actions you take during negotiation. Consider the tactics you are going to use at the negotiation. Do you use distributive tactics, integrative tactics, persuasion approaches or a combination of them? Discuss upon your decision, providing specific examples.

Question 5 (25%) Suppose you face a deadlock at some point of the negotiation. Give an example. How do you handle it? Justify you position