Nora-Sakari Case Study

Background

Nora Holdings (Nora) and Sakari Oy (Sakari) are attempting to establish a joint-venture (JV) company. The JV Company would be set up in Malaysia to manufacture and commission digital switching exchanges to meet the needs of the telecom industry in Malaysia and in neighboring countries, particularly Indonesia and Tailand (Bhagat, Kashlak, & Phatak, 2009). Nora and Sakari’s main objectives are complimentary, which at first glance, appear to be a picture perfect partnership. Nora is seeking to secure a share of the RM2 billion contract from Telekom Malaysia Bhd (TMB) and consequently acquire knowledge in switching technology (from its partnership with a telecom multinational corporation) and replicate the telecom technology/modular in the Malaysian market. Sakari’s primary objective is to use the JV as a “hub” to gain access into other markets, specifically the Asia-Pacific region.

Case Issues

There are several underlying issues in this case that hindered Nora and Sakari from finalizing negotiations. One obvious issue is the lack of understanding of each other’s country and cultural differences. This was exhibited by Zainal approaching the Sakari negotiations the same way had he with companies based in North America or the United Kingdom (Bhagat, 2009). Communication suffered because Sakari negotiators communication styles (verbal and nonverbal) were much different than he was used to, which made it quite difficult for him to determine if the Sakari team had a genuine interest in establishing the JV. Second, Nora had a contractual obligation to TMB that is requiring them to provide the switching technology. However, they have yet to secure a partner that could supply such technology and enable them to comply with TMB contract. A third and equally important issue is the internal politics within Sakari that led to the formation of two opposing “camps”