The Reed Ypec Negotiation

This final case lets you experience some of the complexities of international business and politics by putting you in the seat of a member on the negotiation team in a simulated negotiation process. The Reed - YPEC case follows Reed Oilwell’s attempts to enter the supplier network of Petroecuador, Ecuador’s national oil company. Reed Oilwell faces crucial negotiations with YPEC, a state-run Ecuadorean oil field servicer, which involves various political aspects. This is a case by Harvard Business School Press.

Please note that the case comes in two versions: Reed--YPEC Negotiation: Reed Oilwell (A) contains information for groups representing Reed Oilwell. The case Reed--YPEC Negotiation: YPEC (B) contains information for teams negotiating on behalf of YPEC.

For today’s session, each sub-group will be asked to negotiate on the behalf of either Reed Oilwell or YPEC. The morning session will offer room to prepare for the negotiations. In the plenary session, your group will be matched with a group representing the other party.

The newer a subsidiary is to a country, the more it will use the financial

incentive political strategy. Hypothesis ic: The longer a subsidiary has

operated within a country, the more it will use

the constituency-building political strategy.

Institutional theory similarly focuses on the role

of organizational size and legitimacy. Larger organizations

tend to be more visible and attract more

scrutiny from stakeholders, which in turns threatens

their legitimacy and reputation (Suchman,

1995; Fombrun, 1996). Deephouse (1996) suggests

that,