PLANT CASE Cultural Limitations in the Indian Teams Negotiating Strategy
Indian society has suffered from a historical distrust of
foreign multinationals. Indian public had relatively little experience with large foreign multinationals, creating distrust. Public distrust of foreign companies can also be explained by the fact that India assumed a protectionist ideology post-Independence like many post-colonial regimes, in an effort to direct its economy towards self- reliance. Cultural Limitations in the Indian Teams Negotiating Strategy
Efforts have not been made by the political leadership
in India to move towards constructing an alternative ideology that could function in Indias new economy. These cultural and ideological underpinnings in India explain popular backlash against the Dabhol project, why the Indian government could not sell the merits of the Dabhol project to the Indian public, and ultimately why Indian negotiators assumed a hardliner stance in their negotiations. Cultural Limitations in Enrons Negotiating Strategy Large multinational companies sometimes become complacent, and tend to overlook the critical cultural barriers in global strategy Enron gave primacy to the political and economic variables to direct its strategy in India, ignoring the core cultural values as part of its organizational strategy. Over-exuberant and borderline aggressive tactics employed by Enron during its deal-making with the GOM Enron relied greatly on its management success in other emerging markets as a predictor of how to guide negotiations with India. Other Constraints Institutional Memory As a Constraint in the Decision- making Process The legacy of those killed and injured in the Bhopal disaster of December 1984 that involved the US chemical company.This event had the lasting effects of increasing public concern nationally about issues concerning due diligence by MNCs. The Breakdown of Effective Communication between the Negotiating Parties The Government of Indias affront to what it perceived to be a veiled threat issued by Kenneth Lay that the US government may resort to imposing sanctions on India is an excellent example of how misunderstandings arise between parties to an agreement. Other Constraints The Breakdown of Effective Communication with Stakeholders Neither the merits of the deal nor the conditions and terms of agreement were communicated to the local communities, which contributed to theoverall untenability of the agreement. Agreements suffered from time deficiencies which can be explained by the hastiness and the lack of timeliness at which the agreements were concluded. The process became diluted through an erosion of trust between the parties in large part due to the fact that no business relationship was developed as part of the pre- negotiation strategy