Partial 2 practice

An Australian mining company is negotiating a labor contract with a workers' union. The company is willing to increase wages by 3% to 6%, and the union is demanding a wage increase of 5% to 8%. What is the ZOPA in this negotiation?

• 3% to 6%

• 5% to 6%

• 3% to 8%

• 5% to 8%

Answer explanation

The ZOPA represents the range of acceptable outcomes where both parties' expectations overlap. In this case, the overlapping: 5% to 6%

A French fashion brand is negotiating a lease for a retail space in a New York shopping mall. The brand is willing to pay between $10,000 and $15,000 per month in rent, while the mall owner is asking for $12,000 to $20,000 per month. What is the ZOPA in this negotiation?

• $10,000 to $15,000

• $12,000 to $15,000

• $10,000 to $20,000

• $12,000 to $20,000

Answer explanation

The ZOPA is the range where both parties' expectations overlap. In this case, the overlapping range is $12,000 to $15,000 per month.

An Indian automobile manufacturer is negotiating a joint venture with a Chinese company to expand its operations in China. Which of the following options represents an appropriate BATNA for the Indian company?

• Agree to any joint venture terms proposed by the Chinese company

• Form a joint venture with a different Chinese company if negotiations fail

• Insist on specific joint venture terms without considering other options

• Reject any joint venture proposals that do not meet the Indian company's demands

Answer explanation

A suitable BATNA should provide a negotiator with a viable alternative should negotiations fail. Forming a joint venture with a different Chinese company if negotiations fail offers the Indian company a realistic alternative to pursue if the negotiation with the Chinese company fails.

A Mexican clothing manufacturer is negotiating a distribution deal with a French retailer. Which of the following options represents a suitable BATNA for the Mexican company?

• Accept any distribution deal proposed by the French retailer

• Distribute its products through online sales channels if negotiations fail

• Negotiate exclusively with the French retailer, regardless of the outcome

• Demand a distribution deal that benefits the Mexican company exclusively

Answer explanation

A suitable BATNA should provide a negotiator with a viable alternative should negotiations fail. Distributing its products through online sales channels if negotiations fail offers an alternative distribution channel for the Mexican company if the negotiation with the French retailer fails.

An American pharmaceutical company is negotiating a research collaboration with a Swiss biotechnology company. The American company should determine its BATNA in case the negotiations fail. Which of the following is a possible BATNA for the American company?

• Collaborate with a Belgian biotechnology company instead

• Offer a higher research budget to the Swiss biotechnology company

• Extend the duration of the research collaboration with the Swiss company

• Propose additional research projects to the Swiss biotechnology company

Answer explanation

A BATNA represents the best alternative in the event negotiations fail. In this case, collaborating with another biotechnology company (Belgian biotechnology company)

A Spanish winery is negotiating a distribution agreement with an Italian wine distributor. The Spanish winery is willing to supply between 1,000 and 1,500 cases per month, and the Italian distributor wants to purchase between 1,200 and 1,800 cases per month. What is the ZOPA in this negotiation?

• 1,000 to 1,500 cases

• 1,200 to 1,500 cases

• 1,000 to 1,800 cases

• 1,200 to 1,800 cases

Answer explanation

The ZOPA is the range where both parties' expectations overlap. In this case, the overlapping range is 1,200 to 1,500 cases per month.

A German pharmaceutical company is involved in a dispute with an Indian generic drug manufacturer over patent rights. What strategy should the German company use to resolve the dispute and avoid costly litigation?

• Insist on their legal rights and demand that the Indian company cease production of the generic drug

• Bring in a neutral third party or mediator to assist in the negotiation process

• Appeal to shared values, such as innovation and public health

• Offer the Indian company a partnership to develop new drugs together

Answer explanation

By bringing in a neutral third party or mediator, the German company can facilitate negotiation and find common ground, helping to resolve the dispute and avoid costly litigation.

A South Korean tech company is seeking to enter the U.S. market and establish partnerships with American tech firms. What relationship-building strategy should the South Korean company use to establish trust and rapport with American partners?

• Focus on the quality and features of their products

• Engage in informal discussions and social events to establish personal connections

• Make strategic concessions, such as sharing technology or offering joint development opportunities

• Appeal to shared values, such as innovation and customer satisfaction

Answer explanation

By engaging in informal discussions and social events, the South Korean company can build relationships and establish trust and rapport with American partners, which is crucial in the context of intercultural negotiations.

A U.S. retail company is negotiating a contract renewal with a Spanish supplier. The Spanish supplier is disappointed by the previous contract terms and is hesitant to continue the relationship. What strategy should the U.S. retail company use to rebuild trust with the Spanish supplier?

• Show flexibility by considering alternative contract terms

• Anchor the negotiation by proposing new contract terms

• Build trust by establishing a positive relationship based on honesty and transparency

• Use objective criteria to support their position

Answer explanation

In this situation, rebuilding trust is crucial. The U.S. retail company should establish a positive relationship based on honesty, transparency, and mutual respect to regain the Spanish supplier's trust.

A Canadian software development company is negotiating a partnership with a French company. The French company has concerns about the software's compatibility with their existing systems. Which strategy should the Canadian company use to address these concerns?

• Employ active listening to fully understand the French company's concerns

• Use objective criteria to provide verifiable data on compatibility

• Manage emotions to diffuse tension and maintain constructive dialogue

• Show flexibility by considering alternative partnership terms

Answer explanation

Using objective criteria helps establish a fair and objective basis for negotiation. The Canadian company should provide verifiable data on compatibility to address the French company's concerns.