Please answer all the questions as soon as possible.

Task 1.

Summarize the most important cultural differences between Mexico and Germany based on the information you can find in the folder Week 12.

Also explain, what possible conflicts might come up in negotiations based on these differences.

Task 2.

What negotiation techniques that we learned about can be detected in the case study.

Task 3.

Which party can be blamed for the failure of the negotiations? Give your reasons.

Case C: Germans in Mexico German carmaker ALV determined that its most promising option to establish a stronger presence in the important North American auto market was to set up an assembly plant in Mexico, with its low wages and good trade access to the United States. After assessing several alternatives, the company identified an existing plant in Guadalajara as the most suitable facility for the new assembly operation. Current owner Grupo Jalisco had put the plant up for sale. Negotiations appeared to be little more than a formality, since commercial real estate values seemed well established through other plants that had recently been sold in the Guadalajara area. A middle manager representing ALV's worldwide facility management group set up a meeting with the current plant owner, prepared to spend no more than a day or two in the country. In spite of polite introductions and small talk, the initial meeting did not go well. Focused on reaching agreement quickly, ALV had previously submitted a detailed proposal in writing. However, Grupo Jalisco's negotiators had apparently not even read this proposal, since the sales price they demanded as the bargaining began was higher than the Germans' offer by a very substantial amount. The German negotiator sharply rejected the demand, stating that the Mexicans 'could not possibly be serious in asking for such an outrageous sum.' He reminded them of the offer ALV had already made, which he considered very reasonable. What followed was a fierce competitive bargaining exchange. While Grupo Jalisco's negotiators successively lowered their demands, ALV's offer did not move by much. The company's representative repeatedly emphasized that his opening offer was fair and that he would not raise it unless the other side first provided a reasonable counteroffer. When Grupo Jalisco finally lowered its request by a sizeable amount, he started making small concessions in response, upon which the Mexican team responded with similarly small ones. Though the delta between bidding and asking price was no longer very substantial, subsequent concessions offered by either side were clearly becoming too small to support a mutually acceptable compromise. More and more agitated over what he called the Mexicans' 'unreasonable behavior,' the German made what he announced as his final offer, suggesting that the Grupo Jalisco team 'take it or leave it.' Again, this did not seem to produce the desired response. The Mexican negotiators instead countered with another small concession. Determined to stay his course, the German threatened to end the meeting and return to his hotel unless Grupo Jalisco accepted his latest offer. Since this did not trigger a clear response either, he ultimately packed up his papers, rose, and left. The following day, ALV's representative called Grupo Jalisco in order to reopen the negotiation. He was prepared to offer small additional concessions, which he was convinced was all it would take to seal the deal. To his surprise, his counterparts stated that they were no longer interested in negotiating with ALV. The plant later sold to another party for the exact same price the Germans had last offered. ALV's plans to assemble vehicles in Mexico were delayed by several months. A number of cultural misunderstandings characterize this case. The most significant one may be the failure of both parties to respect each other's pride. The Mexican team might already have been offended when realizing that the German company sent a