Pacific Oil Company Case Study

Negotiation and Conflict Resolution – Unit 3 Case Study

Stephen D. Decker

Southwestern College

Negotiation and Conflict Resolution – Unit 3 Case Study

Jean Fontaine and Paul Gaudin’s initial strategy was strong, but their many weaknesses put Pacific Oil in danger of losing their long-time client Reliant Chemical.  Frederick Hauptmann and Egon Zinnser had some weaknesses, but their notable strengths dominated the negotiation for a renewal contract with Pacific Oil.  In the end Jean Fontaine should take action to better future negotiations.

Fontaine and Gaudin

Two of Pacific Oil’s members Jean Fontaine, Marketing Vice President in Europe and Paul Gaudin, VCM Marketing Manager went into negotiations with Reliant Chemical.  Their goal was to sign a more long-term agreement.  Initially this worked, but with the unstable future of Vinyl Chloride Monomer (VCM) a renewal contract for a longer term was planned (Lewicki,  Barry, & Saunders, (2015).  Fontaine and Gaudin assumed the new contract would be signed with no major hurdles or objectives, and that the dominant point of negotiation would be price.  Fontaine and Gaudin, started the renewal process several years before Reliant’s contract was up, hoping to establish a contract extension of five years. Unfortunately, Fontaine and Gaudin did not properly research their client’s needs and relied on their long-standing relationship to carry them forward.  They were ill prepared to answer Reliant’s key negotiatorst.  Egon Zinnser, Vice President of European Operations and Frederick Hauptmann, Senior Purchasing Manager.  Pacific was not prepared to address the concerns and requests that Reliant brought up during the negotiation.  Both parties wanted to move quickly toward signing a contract, Pacific did not have a thorough negotiation strategy or BATNA established in the event the negotiation did not go well.  Garner 2013 suggests a 7-step process to preparing for a negotiation and Pacific failed to take any steps.  Reliant had all their ducks in a row.

Hauptmann and Zinnser

        Zinnser and Hauptmann were very prepared for the negotiation and when not, they delayed signing the contract until they could negotiate a better deal for Reliant.  Although no strategy was discussed, one can deduce they allowed some concessions, so they could eventually save big dollars in the end.  Discussing competitors with Pacific was a strong move.  Their expert power proved to give them an advantage when negotiating as it appeared to stun Fontaine and Gaudin.  On several occasion Pacific needed to discuss with senior leaders what Reliant wanted.  Reliant’s message seemed to frame the message so Pacific would say yes.  Time and time again, Reliant stated counter-offers, regardless of significance to which Pacific agreed.  “People who agree with one statement or proposal, even though it may be minor, are likely to agree with a second, more significant statement or proposal from the same person or the same topic.” (Lewicki,  Barry, & Saunders, (2015).