An example
Liz is a regional manager with Wholesale Fcxxis, a large and growing national produce disuibutor. She is responsible for managing relationships with suppli-ers, mostly small farmers in the state, as well as customers of Wholesale Foods. who range from small corner grocers to the stores of the largest regional super-market chain. One of the suppliers with whom she must negotiate is Terry. the owner of a small fruit orchard at the northeast corner of the state. As the manager of a huge territory, Liz has to worry about her profitability, which in turn is a function of the price at which she buys and sells produce. Rut her profitability is also affected by the amount of effort it takes her to get the product to market and how much she has to spend to overcome glitches in her delivery system. For example, it a farmer is late with his deliveries, Liz has to spend money to get produce from somewhere else, usually at a higher price. to meet her obligations to her customers: or if a fanner delivers fruit in bulk. Liz Itas ro spend money to ceire it properly. Similarly. her profitability is related to the ;nice she can get for die produce from her customers. If she can develop a reputation For being a .SCRIfee of -quality’ produce. she can get all extra few cents per pound over average market prices, which rapidly adds up to big prof-its. To manage some of these risks. Liz maintains a small fleet of closed-bed trucks capable of traveling around the state and employs a few mote workers than is absolutely necessary- in her warehouses. Terry is his own boss. running a farm that has been in his family for three generations. Over his lifetime he has seen the farm experiment with a number of different crops, but at significant risk: a bad harvest with a supposedly im-proved strain of one of his traditional crops could wipe him out. Similarly. die risk of planting something different and not being able to sell it at a good price could mean not being able to pay off the season’s debts at hamest rime, which in turn would mean not tieing able to buy needed stocks and supplies at plant-ing time Terry has one open-bed pickup truck he uses to bring in supplies and deliver fruit_ He hires only seasonal help, at planting and harvest times. Each year, Liz and Tem• get together and disc-ass terms: quantities and prices tar his Emir, the dates on which deliver- should be made, how the fnlit will he crated, etc. Although they get along. Liz has the sense tkat there is more , – a t
1. Who are the stakeholders in the case, and what are the interests of each stakeholder?
2. List options to meet the interests of each party.
3. List possible external standards (precedents, benchmarks, prior practice, accepted principles).
4. From Liz’s perspective, what BATNA do you recommend?
4. From Terry’s perspective, what BATNA do you recommend.
5. What are the primary substantive issues and problems faced by both sides?
6. What can each party do to separate the people issues from the substantive issues?