Integrative Negotiation Process:
There were issues in this negotiation, which were optima for both sides without much negotiation. The amount of infrastructure that the Chinese could provide and the scholarships for the Chinese Students. There were not big issues and benefited both parties.
Creating Options:
The Fa Rong created a good share of the options: There were issues such as the 51% ownership, which was not negotiable, but the option of having joint decision making capability was. The design specification issue was not really clarified in the final contract. This could come back to haunt the negotiation team in the future. We know that the American team could not provide the most up-to-date technology due to restrictions of the American government, but the final issue of exactly what would be forthcoming was not resolved. The issue of the 7.5 million to 10 million equity was resolved by the fact that the Chinese government would pay ½ the housing if the equity in the company were raised to 10 million. The issue of the wafers was agreed on in a fashion that was advantageous to the Chinese; as it was agreed that we would guarantee a fixed number of wafers when our production capacity was solidified. We also offered the option of tax breaks, to compensate for the smaller percentage of ownership of the American team.
Positioning.
There was more positioning on the part of the American team regarding the 70% ownership. It took several rounds of negotiation for them to agree to the lesser amount, even when the option of joint ownership was introduced into the negotiation. I do not believe that the entire team was in agreement in this matter.
BATNA
I do think the final agreement was beneficial to both sides. The ...