McDollar's in Motherland.

Barkacs, Linda L. ; Barkacs, Craig B.

CASE DESCRIPTION

The purpose of this case is to provide an international negotiation exercise, derived from a specific setting adapted from a real situation, that tests the ability of students to overcome narrow thinking and cultural obstacles and structure an integrative and mutually beneficial agreement. The case is appropriate for junior or senior undergraduate students or first year graduate students, depending upon the depth with which the instructor wishes to explore the case and the instructor's comfort level with the issues included in the case. The negotiation exercise is designed to take about two hours (including the debrief), although more time may be spent on it. The case requires that students devote approximately one hour to preparation of the case, but this time can be spent outside class if necessary.

CASE SYNOPSIS

This case is based in a very general way on the circumstances surrounding McDonald's efforts to begin operations in the former Soviet Union. As George Cohen, the McDonald's executive charged with trying to gain a foothold in the Soviet Union, stated:

We learned to treat frustration and delay like natures force of gravity. Remember, this was the height of the Cold War. It was 1976. Brezhnev was in power. It was the "Evil Empire." It was Karl Marx in one corner and Adam Smith in another corner, squaring off. There was no happiness, everything was gloomy. And here we were, wading in. We, the epitome of capitalism, mother and apple pie, were trying to get into the Soviet Union during the height of the Cold War (Moon and Herman, 1982).

This negotiation exercise is set in the fictitious nation of Motherland. Motherland certainly resembles Russia, but the use of the country's name directly in the case is avoided to reduce student tendencies to stereotype real people and to avoid potential errors introduced by students who have knowledge of Russian culture. Thus, Motherlandian culture is intended bear some similarity to Russian culture (and in fact may be portrayed, for purposes of this exercise, as what some may regard as stereotypical Russian culture--fairly or not--on steroids!), but Motherlandian culture can only be truly explained by the materials in this exercise.

The negotiation helps students learn to negotiate in a more integrative fashion. Because the exercise is not scored quantitatively based on outcomes, the situation can lead to the use of creative collaboration in an unexpected venue. The Cohen quote above illustrates a common perception of Cold War relations with Russia before the fall of the Soviet Union. The marriage of McDollar's, which is the metaphoric embodiment of capitalism, to a struggling post-communist state seems counter-intuitive by its very nature. The odd-couple dynamic in this negotiation exercise, however, actually creates possibilities that can be beneficial to both parties. In the case of McDonald's, these possibilities were beneficial to both parties. Thus, this negotiation puts students in an adversarial mind set, which they must work beyond to reap the collective benefits of an agreement. We hope that the students will be drawn toward this understanding through analyses of their own best alternative to a negotiated agreement (BATNA) because both sides lose if the parties fail to reach an agreement.

In addition to testing students' understanding of BATNAs, the McDollar's negotiation challenges students to decide between two drastic extremes. On the one hand, they will be tempted by profit motives and corporate advancement. On the other, they have the chance to promote social welfare among an impoverished people. This is an internal conflict that those on the McDollar's side of the negotiation are especially likely to encounter because, as Americans, it is remarkably easy and culturally predictable to lapse into greed-driven competition. This universal tension between public good and private gain is played out at both the individual level and the broader societal level in this negotiation exercise, given the situational conflict between communism and capitalism, collectivism and individualism, and every other difference between Soviet and U.S. culture. This case is built on a bargaining position template developed by Barkacs and Barkacs (2004).

McDOLLAR'S IN MOTHERLAND

Role for Taylor Dunn, Founder and Senior Chairperson of McDollar's Motherland

General Information

This case takes place in fictional foreign nation of Motherland, which for purposes of this case will be regarded as a former Soviet republic. One may properly infer that the fictitious Motherland strongly resembles Russia, but Russia specifically is not used in order to avoid stereotyping real people and to avoid potential mistakes regarding Russian culture. Thus, while Motherlandian culture is intended bear some similarity to Russian culture (and in fact may be portrayed, for purposes of this exercise, as what some may regard--fairly or not--as stereotypical Russian culture), Motherlandian culture nevertheless exists exclusively within the confines of this exercise.

In terms of setting the stage for this exercise, the Cold War is history and political and economic change is underway in the former communist regimes of Eastern Europe. Currently in Motherland, capitalism is emerging--providing a more enticing landscape for foreign direct investment. With the Motherlandian economy still struggling and in transition, and with some of its citizens starving and freezing, Motherland has gradually begun to westernize. The concepts of glasnost and perestroika (meaning "openness" and "economic restructuring," respectively) are prominent features of the political and economic reform in Motherland. To the Motherlandians, who were behind the Iron Curtain for almost a century, such concepts are quite understandably extraordinary and revolutionary.

Soviet propaganda and enculturation, however, have created a lasting negative image of Capitalists, specifically Americans, as greedy, power hungry beasts. A major problem for American investors is trying to overcome this perception. With a culture dominated by Socialist sentiment, which promises food and heat for all its citizens, the Motherlandian general public is wary of western business infiltration, and its emphasis on personal gain and wealth.

The Motherlandian government has begrudgingly agreed to allow some Western firms to do business in the Motherland. While such a shift in policy offers potentially lucrative business ventures for Western firms, the political and economic risks are substantial, creating tension and conflict between prospective foreign business investors and the Motherlandian government.

One particular investment possibility involves McDollar's, a world renowned fast food establishment based in the United States. McDollar's ascended to the top tier of fast food chains when the owners streamlined the hamburger serving process, and redefined the restaurant industry forever. Since then the company has been wildly successful in its ventures, with tens of thousands of locations on six continents. The corporation employs over three million people, netted revenues in the billions last year, and has become an American branding icon with the likes of Coca-Cola and Nike. Their classic symbol, the green dollar sign ($) is universally recognized as an eating establishment of the highest quality and a beacon of profit for franchisees everywhere.

A meeting is scheduled between Taylor Dunn, the founder and Senior Chairperson of the so far only conceptual "McDollar's Motherland," and Alex Kasiminov, the current Motherlandian Minister of Commerce. With no current fast-food competition in Motherland, Dunn is interested in the expansion of McDollar's into the Russian market, believing that he/she will enter into it unopposed, allowing him/her to reap an incredible profit. On the other hand, Kasiminov is entering the negotiation with the best interests of his/her country and those he/she represents in mind. While each side has apprehensions about the other, and in light of the substantial cultural differences, Dunn and Kasiminov nevertheless hope to meet civilly and productively.

Confidential Information for Taylor Dunn

NOTE: This exercise can easily be conducted as a team negotiation. In fact, the exercise works very well with having a team with anywhere from three to five negotiators on each side. Moreover, the teams do not have to be evenly matched. If negotiation teams are used, each additional team member can create his or her own name and title, or that can be generated and assigned by the instructor. Possible titles might include any of the following:

VP of Sales

VP of Marketing

Public Relations Representative

Motherlandian Economics Specialist

Background

You are the founder and Senior Chairperson of McDollar's Motherland. The only problem is that McDollar's Motherland exists merely as a concept, inasmuch as you have yet to open a single fast food restaurant in Motherland. Your relationship with the McDollar's corporation, however, is no recent development. You first met Jay Brock, the company's mastermind, shortly after you graduated from law school, and two years later you abandoned your career in law to open your first McDollar's in Eastern Canada. With remarkable speed you turned McDollar's into the largest food service organization in Canada.

Even though you have yet to open a McDollar's restaurant anywhere in the former Soviet Union, you have already invested 14 years of blood, sweat and tears into the cause. Years ago you first realized the potential--a region with hundreds of millions of people with a diet very similar to an Americans. Since then you have been traveling to Motherland five to six times each year to meet with government officials and trying to cut through all of the bureaucratic red tape. This process began during the Cold War, so such excursions were not vacations, but rather arduous business trips half way around the world. Little progress had been made until recently, when you finally received tentative approval to actually build a McDollar's Motherland in the capital city of Mosberg.

Since then you have been working out the details of the agreement with government officials. Your plan is to build and operate twenty restaurants within Mosberg, but you still need to work out a few matters before you can actually finalize the deal. While you had previously met and worked primarily with local officials of Mosberg, a meeting has been arranged for you to speak directly with the Minister of Commerce, Alex Kasiminov. While you have made much progress over the years, you realize that Kasiminov may make various demands and insist on numerous concessions before being willing to give final approval of the project. Because he/she is the Minister of Commerce, you realize that he/she can walk away at any time if dissatisfied and, accordingly, leave you empty handed and with nothing to show for 14 years of effort and all the associated costs. You have always enjoyed the full confidence and support of Jay Brock, but you also know that he is obsessed with penetrating the Motherlandian market at any cost. Losing this contract would deal a powerful blow to your self esteem and would cripple your heretofore excellent relationship with Jay Brock. You have heard rumors from corporate that failing to finalize a deal would, at the very least, result in a demotion and, at worst, lead to your forced early retirement.

Given that your corporate career hangs in the balance, you should take considerable time to thoroughly review the issues. Whether the twenty prospective restaurants within Mosberg become a reality depends on your reaching agreement on following issues:

The Menu

The McDollar's menu is central to its identity, and has always stayed true to its basic fare of burgers, fries and McParts. No new restaurant has ever deviated from the same staple menu, and to do so would be seen within the corporation as blasphemous to McDollar's name. The menu has come under the scrutiny of the Motherlandians, and you anticipate that Kasiminov will want to change it somehow to make it more Motherlandian. Changes to the menu would be against everything that is McDollar's, and would certainly arouse the ire of the corporate headquarters. Do you really want your brand name to be associated with cabbage soup?

Source Locally?

As is often the case with foreign direct investment ventures, one of the main decisions to be made is whether to source locally, or to import needed ingredients and supplies. While sourcing locally is normally the low-cost answer within developing countries, Motherland is in a class of its own. Sourcing locally would almost certainly be beneficial for the company over the long run, but you are concerned that up front costs may seem steep to corporate, even though Jay Brock has never said any such thing.

The supply chain--to the extent you can call it that--in most of Motherland is antiquated, fragmented, and in many cases, non-existent. Farming is very low-tech and inefficient, and roads desperately need repair. Moreover, there is nowhere to process the local products in order to maintain the consistency required by corporate McDollar's back home.

In order to even consider sourcing locally, a number of improvements would have to be made. For example, McDollar's would have to bring in agricultural specialists from all over the world to educate the Motherlandian farmers on how to grow the products they needed (most Motherlandians do not even know of the existence of the larger Idaho potato). Somehow these specialists would have to transform old-world farms into efficient modern day agri-businesses. Given the nightmare logistical constraints in Motherland, McDollar's would also have to invest in infrastructure, such as roads to transport local goods. Finally, McDollar's would have to build the behemoth McComplex, a 100,000 square foot processing plant, in a nearby suburb of Mosberg in order to maintain food consistency. This complex would be a way to ensure quality control, and would include a self-contained bakery, dairy, and meat-cutting operation facility, while employing over 400 people.

All of these projects would cost in the neighborhood of $50 million up front, making the projects significant initial investments. While these costs would easily be recouped over the years if McDollar's Motherland is a success, they might be very difficult to explain to corporate back home. After 14 years of your failure to deliver in Motherland, however, Jay Brock's patience is wearing thin, and you know he wants a deal made sooner rather than later. You could ask Kasiminov to help finance these investments in infrastructure, but with Motherland's current economic situation, you doubt Kasiminov will be of much help.

The alternative, importing the inputs from existing European suppliers, would be at slightly higher unit costs, but would require no startup investments. The problem with this approach, however, is that it would do nothing to build up the necessary internal infrastructure in Motherland, which both you and Jay Brock regard as crucial to the long term success of McDollar's in Motherland.

Hire Locally?

While most typical workers in your restaurants are likely to be Motherlandian, just who will hold management positions is something that still has not been resolved. If you hire local managers, they will not be as in tune with the McDollar's corporate culture. This worries you and some at corporate headquarters because McDollar's has a strong image that must always be maintained. As the first restaurant in a large new market, the Mosberg McDollar's must epitomize the McDollar's image and values. In fact, in the United States, all managers must pass a rigorous training program at Hamburger University located at corporate headquarters. For you, American managers, at least to open the first restaurant, seem better suited for the task.

If left with no other recourse, you might consider Motherlandian managers, as long as they first attend Hamburger University, although their transportation and housing are additional costs that you would probably be asked to incur by the Motherlandians.

Ownership

Attempting to do business in a country with a history of communism can be awkward and cumbersome because in communist countries most business enterprises are owned by the state. All of the countries in which you have done business previously have allowed you to maintain complete ownership of your restaurants, but in Motherland you anticipate that will not be the case. You doubt that the Motherlandians will allow you to maintain 100% control of the venture, but you are still interested in keeping as much ownership as possible. Allowing the Motherlandian government to control too much of the restaurant could set a dangerous and unheard of precedent, which might also be poorly received by the corporate office.

Conversely, having the government as business partner could have its advantages. The Motherlandian government's political clout could certainly help with--and in fact be of crucial importance to--certain matters, such as accessing utilities, improving infrastructure, and acquiring real estate. Besides, the more the Motherlandian government is involved the greater interest it has in making the McDollar's Motherland a success.

Location

Location will be one of the most important points of your discussion with Minister Kasiminov, as it will greatly affect the performance of your business. You have heard rumors that three possible sites are being considered for the first McDollar's. The first site is a prime real estate, located right smack in Pushpin Square, just one block from Motherland's Lenin Memorial. This site would gain lots of attention and pedestrian traffic, allowing McDollar's to prosper and, for that reason, you regard this specific location as ideal for your inaugural restaurant. Given that it is such valuable space in such a central location, however, you know that Kasiminov will demand a number of concessions to accommodate your strong preference for this location.

The other two locations are less appealing. One is located in a popular business district ... popular before the Bolshevik revolution at least. Now it is mostly abandoned. The other is in a very well trafficked part of town, situated right between the Red Light District and a very historic site, an old Stalinist Gulag.

Currency

Currency in the republics of the former Soviet Union is always a big topic of discussion because it is seen as little more than just colored paper exchanged for goods; currency defines the social class of the carrier as well. The local currency, the Ruble, is nontransferable money widely circulated amongst the commoners of Motherland. The aristocracy and foreigners, however, use hard currency, such as dollars or euros. It is illegal for common people to hold any form of hard currency, and in fact, many of the nicer shops are hard currency only, and do not permit peasantry entrance.

Beyond the class warfare issue, currency selection is also a big decision for McDollar's because of the risks of the Ruble. The Motherlandian economy has been known for periods of hyperinflation, which then trigger super devaluation. Apart from the risk that the Ruble may be severely devalued, the Ruble is also a blocked currency (i.e., nontransferable), so any profit made must be kept within Motherland.

Hard currency alienates a vast majority of the population so many stores have started having separate lines, one for hard currency and one for Rubles. The Ruble lines are always long and slow-moving while the hard currency lines are typically quick and easy. A dual currency has its merits, as some profits could be counted on and repatriated. Even so, the separate line system is deeply resented by the common Motherlandians, and would almost certainly keep them from viewing McDollar's Motherland as a truly Motherlandian enterprise, which would lead to depressed sales, if not outright boycotts. Conversely, corporate McDollar's will not like to hear that your subsidiary will not be sending any profits home, and that investments are being put at economic risk.

Your Task

Represent the McDollar's corporation in drafting the final agreement with Minister of Commerce Kasiminov on each of the listed issues.

For McDollar's Negotiators

Some things an American should know before negotiating in Motherland:

Most Motherlandian business people have high expectations of Western business people. You will be judged immediately by the way you dress and deport yourself. Dress conservatively and well. During cold seasons, dress in layers. Also note these suggestions:

* Always be on time, it is very important to the Motherlandians.

* Shake everyone's hand firmly when you greet them, do not expect friendly smiles.

* Defer to the senior official to lead the meeting and wait to be given the floor before engaging Motherlandians.

* Be firm and polite at all times; do not be pushed.

* Accept cookies and tea when offered.

* Motherlandians drink lots of vodka and smoke profusely. If you smoke as well, make sure to offer cigarettes generously. Not doing so is considered incredibly rude.

* Business cards are handed out liberally in Motherland and are always exchanged at business meetings. The ceremony of presenting and receiving business cards is important. Don't treat it lightly.

* Your company should be represented as a specialized team of experts. Presentations should be thoroughly prepared, detailed, factual and short on "salesmanship."

* Motherlandians usually negotiate technical issues very competently, directly and clearly but, being newcomers to capitalism, often do not fully understand Western business practices and objectives. It may be necessary to explain the reasoning behind some of your demands.

* Business negotiations in Motherland are lengthy and may test your patience. Plan to be in for the long haul.

* Personal relationships play a crucial role in Motherlandian business. It is a collectivist culture.

* No agreement is final until a contract has been signed.

The Motherlandians are generally VERY superstitious, so note these points:

* Never shake hands over a threshold: it will lead to an argument.

* Always bring flowers or wine when invited to a Motherlandians home. Do not bring Vodka, as the Motherlandians will already have an ample supply which they believe is of higher quality.

* Never put your feet up on furniture or show the soles of your feet when sitting: it is considered very rude.

* Be careful complimenting something in a host's home: they may try to give it to you.

Adapted From: Bosrock, M. (2005) and Saratov (2005).

FOR McDOLLAR'S NEGOTIATORS

"WINNING AT ALL COSTS ... SOVIET STYLE"

How do you recognize the Soviet style? You distinguish it by the specific behavior of the other side. All "Soviets," whether from Moscow or from Memphis, use the same six steps in the negotiation dance: 1. Extreme initial positions. They always start with tough demands or ridiculous offers that affect the other side's expectation level. 2. Limited authority. The negotiators themselves have little or no authority to make any concessions. 3. Emotional Tactics. They get red faced, raise their voices, and act exasperated-- horrified that they are being taken advantage of. Occasionally they walk out of a meeting in huff. 4. Adversary concessions Should you give in and concede viewed as weakness. something, they are unlikely to reciprocate. 5. Stingy in their concessions. They delay making any concession and when they finally do, it reflects only a minuscule change in their position.

Adapted From: Cohen, H. (1980, p. 121).

MCDOLLAR'S MOVES TO MOTHERLAND

Role for Alex Kasiminov, Minister of Commerce of for Motherland

General Information

This case takes place in fictional foreign nation of Motherland, which for purposes of this case will be regarded as a former Soviet republic. One may properly infer that the fictitious Motherland strongly resembles Russia, but Russia specifically is not used in order to avoid stereotyping real people and to avoid potential mistakes regarding Russian culture. Thus, while Motherlandian culture is intended bear some similarity to Russian culture (and in fact may be portrayed, for purposes of this exercise, as what some may regard--fairly or not--as stereotypical Russian culture), Motherlandian culture nevertheless exists exclusively within the confines of this exercise.

In terms of setting the stage for this exercise, the Cold War is history and political and economic change is underway in the former communist regimes of Eastern Europe. Currently in Motherland, capitalism is emerging--providing a more enticing landscape for foreign direct investment. With the Motherlandian economy still struggling and in transition, and with some of its citizens starving and freezing, Motherland has gradually begun to westernize. The concepts of glasnost and perestroika (meaning "openness" and "economic restructuring," respectively) are prominent features of the political and economic reform in Motherland. To the Motherlandians, who were behind the Iron Curtain for almost a century, such concepts are quite understandably extraordinary and revolutionary.

Soviet propaganda and enculturation, however, have created a lasting negative image of Capitalists, specifically Americans, as greedy, power hungry beasts. A major problem for American investors is trying to overcome this perception. With a culture dominated by Socialist sentiment, which promises food and heat for all its citizens, the Motherlandian general public is wary of western business infiltration, and its emphasis on personal gain and wealth.

The Motherlandian government has begrudgingly agreed to allow some Western firms to do business in Motherland. While such a shift in policy offers potentially lucrative business ventures for Western firms, the political and economic risks are substantial, creating tension and conflict between prospective foreign business investors and the Motherlandian government.

One particular investment possibility involves McDollar's, a world renowned fast food establishment based in the United States. McDollar's ascended to the top tier of fast food chains when the owners streamlined the hamburger serving process, and redefined the restaurant industry forever. Since then the company has been wildly successful in its ventures, with tens of thousands of locations on six continents. The corporation employs over three million people, netted revenues in the billions last year, and has become an American branding icon with the likes of Coca-Cola and Nike. Their classic symbol, the green dollar sign ($) is universally recognized as an eating establishment of the highest quality and a beacon of profit for franchisees everywhere.

A meeting is scheduled between Taylor Dunn, the founder and Senior Chairperson of the so far only conceptual "McDollar's Motherland," and Alex Kasiminov, the current Motherlandian Minister of Commerce. With no current fast-food competition in Motherland, Dunn is interested in the expansion of McDollar's into the Russian market, believing that he/she will enter into it unopposed, allowing him/her to reap an incredible profit. On the other hand, Kasiminov is entering the negotiation with the best interests of his/her country and those he/she represents in mind. While each side has apprehensions about the other, and in light of the substantial cultural differences, Dunn and Kasiminov nevertheless hope to meet civilly and productively.

Confidential Information for Minister Alex Kasiminov

NOTE: This exercise can easily be conducted as a team negotiation. In fact, the exercise works very well with having a team with anywhere from three to five negotiators on each side. Moreover, the teams do not have to be evenly matched. If negotiation teams are used, each additional team member can create his or her own name and title, or that can be generated and assigned by the instructor. Possible titles might include any of the following;

Department of Agriculture

Economic Advisor

Foreign Affairs Advisor

Department of the Interior

Background

You are Alex Kasiminov, the Minister of Commerce for the former Soviet republic Motherland. You take great pride and honor in your mother country and love her people. You are a true public servant and believe that the people should be helped and honestly represented by their government. You have been in government for all of your adult life, and have seen the devastating effects of the Cold War on Motherland and its people throughout your life. You were a Communist, but your views have moderated over time; you have witnessed the advantages and benefits enjoyed in the West, and realize that Motherland must do something to stimulate her troubled economy. After all, it is the Motherlandian people who are struggling to survive, with many of them close to starving to death in the notoriously cold winters. You are also a pragmatist and are painfully aware of the problems with the economy, unemployment, hunger, and dissatisfaction among the population. Yet you have great faith in yourself and your leadership abilities, as well as your government colleagues, and believe that you are the public official who will solve the problems of your country. While you are somewhat wary of the West and of capitalist culture, as most Motherlandians are, you hope that by allowing some foreign investments and business ventures into the Motherlandian market, the nation will greatly benefit.

You have heard good things about McDollar's and their corporation. They have been extremely successful in their operations and have been able to generate amazing profits while expanding all over the world. McDollar's has never expanded into Motherland, however; in fact, there are no "fast food" restaurants in your country and you wonder how your people would respond to this phenomenon that is so popular in the West, especially in America, whose cultural imperialism you find somewhat threatening.

You understand that beyond the first ever McDollar's restaurant in Motherland, McDollar's ultimately wants to establish twenty restaurants in the Mosberg area, and is eager to meet with you to discuss the plans. You are, however, somewhat worried about McDollar's representative in Motherland, Taylor Dunn. You know that Dunn is an excellent business person who has built McDollar's from the ground up into a widely profitable organization. Yet, you believe that Dunn may not always have the best motives behind his/her actions. You are concerned that Dunn is often solely profit-driven and does not take into account any other factors in establishing and promoting his/her business interests. You are unsure whether Dunn will understand and accommodate Russian culture and societal concerns, or whether Dunn will only be looking out for his/her own personal interests, i.e., the bottom line.

Nevertheless, reaching such a deal with such a successful foreign corporation would be extremely beneficial for your country, and your are convinced it will initiate tremendous momentum for starting down the path of improving the standard of living for all Motherlandians. Striking a deal would also result in a considerable boost to your troubled economy by stimulating it with an enormous sum of foreign capital and by creating employment opportunities for the general population. Moreover, agriculture production could receive a boost, existing industries could be redeveloped, and new ones could be launched.

Most importantly, McDollar's could serve as a model for other foreign companies to do the same. This might open the door to more direct foreign investment, which you know would mean more money still for the Motherlandian economy. While you are personally secure in your career and finances, and even though you will not lose anything if McDollar's does not open a franchise in Mosberg, you are acutely aware of how is at stake for the future of Motherland and what an unambiguous and unmitigated disaster it will be if an agreement cannot be reached.

Given that the future economic well-being of Motherland hangs in the balance, you should take considerable time to thoroughly review the issues. Whether the twenty prospective restaurants within Mosberg become a reality depends on your reaching agreement on following issues:

Menu

Culturally, Motherlandians have had little to no concept of fast food. In fact, there have historically only been two kinds of restaurant facilities in Mosberg, the first type being formal dining rooms operated by local governments, which are very strict. They are very formal, with white table cloths and cutlery, and no one would ever consider eating food with their hands. The service has always been horrible, with patrons often sitting for many hours before being served bland Russian food by impolite waiters. The second type of restaurant is the small, informal cafe variety, where patrons stand while eating pelmini, a ravioli-like pastry, with biscuits and coffee.

You feel that there is a great need for more diverse food and restaurant options in Motherland, and that the McDollar's foods will be liked by the people. You also wonder, however, if there will be some wariness by the people toward trying such options as Chicken McParts, and Mega Macs. Accordingly, you would like to see the menu changed or augmented slightly to better accommodate Motherlandian culture and tastes. You favor such popular Motherlandian items such as grilled cheese sandwiches, cabbage salads, burgers with pork patties, and chicken or mushroom soups, and would very much like to see them added to the menu. You want what is best for Motherland and her people, and you are confident these foods should be included as options for the Motherlandian population. Moreover, these popular foods are inexpensive and, better still, could easily be produced and sourced locally, which is very important to you.

Sourced Locally?

You would like to see the food and the ingredients used by McDollar's in Motherland to be sourced locally. For you, the issue of Motherlandian inputs is crucially important, and you want your country to have a strong hand in the operations of such a massive venture in your own backyard. To your way of thinking, the ideal situation would be for everything to be produced and sourced on a local level, with McDollar's financing much needed infrastructure and logistical improvements out of their deep capitalist pocketbooks. You would be insulted, outraged, and humiliated if the company had to import from other countries (especially the gluttonous United States), as this would deprive Motherland of valuable and critically important employment and economic development opportunities.

You understand that the U.S. corporation will most likely want to train Motherlandian producers and farmers in the latest and most efficient techniques in order to increase their productivity. You see this as beneficial and you want it to occur as well; however, you realize that such training comes at a cost, and you paying for it would be very difficult for your government.

Local production and sourcing will require a substantial facility in which to store and generate the food and drink to be served. The McDollar's corporation has long had a company motto of keeping their products "consistently the best," no matter where in the world they are operating. The burgers sold in New York would need to be the same burger sold in Mosberg; therefore, the ingredients and food processes must be the same. One of the ways in which to achieve this is to construct in or around Mosberg one of McDollar's large food production facilities, lovingly called the McComplex by its originators. This complex is the best way to ensure quality control, and would include a self-contained bakery, dairy, and meat-cutting operation facility, while employing over 400 people. While it would cost over McDollar's $50 million to build it, its construction is an imperative, and another great opportunity to boost your economy. You are confident that McDollar's plans to build the McComplex, and that Dunn will offer to pay for it. You do know as an absolute certainty that your government does not have sufficient funds to pay for such a project, nor do you even have the authority to agree to such an expenditure.

Hire Locally?

With the make-up of the workforce, one pressing issue is whether McDollar's will hire and employ locally or will instead want to bring in outside managers. You of course will insist that McDollar's hire local Motherlandians, as your economy has been experiencing unprecedented unemployment levels and desperately needs the job opportunities made available by the venture. Skeptics point out that Motherlandian employees, particularly those working in the food services industries, have a reputation for being unfriendly and unmotivated. You do not believe this is an entirely fair assessment, but you do realize that McDollar's holds, as one of its key values, its cheerful and friendly customer service. You are confident that Motherlandian workers have much to offer. Many are very well-educated and intelligent, and have backgrounds in such fields as rocket science, health care, and other areas requiring higher education. It would therefore be possible to hire very well educated persons from these sectors who could staff and represent the restaurants extraordinarily well.

You would dread seeing the venture in Mosberg dominated by American managers, who you feel would be only profit-driven and would not understand the needs and culture of Motherlandian employees and customers. Therefore, you must insist that all employees (managers and floor workers) of McDollar's in Motherland be Motherlandian citizens. You do realize that once you get your way on this, Dunn may require Motherlandian Managers to be trained at Hamburger University, the American training center for the McDollar's corporation. If Dunn does require such training, however, it only makes sense that McDollar's should pay the costs for any such training, the transportation involved, and the housing necessary for these managers.

Ownership

During this time of Motherland's transition economy, the Motherlandian government has taken upon itself the role of undertaking transactions with foreign firms, instead of allowing individual Motherlandian companies to create joint ventures on their own. Motherlandian law stipulates that government still controls all services in the city, including restaurants, utilities, and real estate. As a result of this, you want to retain as much ownership of the McDollar's Motherlandian venture as possible, but you cannot go lower than 51% and, in fact, you have no authority to go any lower. If you did have such authority (which you don't), you would never be able to take less than this figure as you would seem weak in the eyes of the Motherlandian people, and you cannot be considered weak. Such public opinion would ruin you politically and your future prospects. You sincerely expect that McDollar's will accept such an arrangement, given that is it they who are guests in your homeland. You also know that your government can truly help assist the venture if you are given the majority share of the ownership. If McDollar's needs land, you will be able to get them land. If they need electricity, you can get your powerful military to put in power lines and utilities.

Location

Another important issue for you is the location of the restaurant venture in your capital city of Mosberg. Location is important to you, as it can increase profitability. Profitability, however, is not the only consideration. Motherlandian sentiment--how the people regard a specific location is also a major factor.

You have heard rumors that three possible sites are being considered for the first McDollar's. The first site is prime real estate, located directly in Pushpin Square, just one block from the Lenin Memorial. There is a hotel going out of business there, and you could pull some strings to allow McDollar's to take over the site. Locating at that site would attract a great deal of attention and pedestrian traffic, allowing McDollar's to take off financially. Critics believe, however, that having such a Western influence so near to the great Communist icon of Lenin will be problematic. Given the vocal opposition, you would be required to expend considerable political capital to secure this site.

One other complicating factor for this particular site is that the funds needed to renovate the hotel would make it impossible for you to contribute to training costs at Hamburger University for local management, if McDollar's ends up insisting on such training and further suggests that the Motherlandian government would be expected to help pay for it.

The other two locations under consideration are less than optimal. One is located in a popular business district ... popular before the Bolshevik revolution at least. Now it is mostly abandoned. The other is in a very well trafficked part of town, situated right between the Red Light District and a very historic site, an old Stalinist Gulag.

Currency

Whether to transact business in Rubles or hard currency is another important issue. The historical legacy of Motherland's currency is very important to you and to the Motherlandian people. It helps to define who the Motherlandians are and it is a reflection of their culture. The local currency, the Ruble, is a blocked currency (nontransferable money) widely circulated amongst the commoners of Motherland. Motherland has had a history of hyper-inflation, however, which has led the aristocracy and foreigners to use hard currency, such as dollars or euros. It is illegal for commoners to hold any form of hard currency, and in fact, many of the nicer shops are hard currency only, and do not permit entry by peasants.

Not surprisingly, hard currency alienates a vast majority of the population so many stores have started having separate lines for hard currency and Rubles, with the Ruble line always being out the door and slow moving and the hard currency line being short and fast moving. The separate line system is deeply resented by the majority of Motherlandian people, and may keep them from viewing McDollar's Motherland as a truly Motherlandian enterprise. You are looking out for the average Motherlandian, and feel that they would best be represented by the Rubles system, and would be more willing to accept McDollar's if it operated solely with Rubles. Better still, having a non-transferable (or blocked) currency seals the profits in Motherland, which will benefit your economy further.

Your Task

To conscientiously and in good faith represent the Motherlandian Government and the Motherlandian people in attempting to reach a final agreement with Taylor Dunn and the Americans on each of the listed issues.

Motherlandian Business Practices and Culture

(For Motherlandian Negotiators)

Most Motherlandian business people have high expectations of Western business people. They judge Western business people immediately by the way they dress and deport themselves, which means Western business people should dress conservatively and well. During cold seasons, dress is expected to be in layers. That which follows reflects general tendencies of the Motherlandian people:

* Being on time is very important.

* Shaking everyone's hand firmly when greeting them, without offering friendly smiles.

* Deferring to the ranking senior official to lead meetings, and waiting to be given the floor before engaging in a conversation.

* Being firm and polite at all times; but not being afraid to push hard.

* Offering cookies and tea, expecting that they will be accepted and received gracefully.

* Drinking lots of vodka and smoking profusely. If other guests present smoke as well, such guests are expected to offer cigarettes generously. Not doing so is considered incredibly rude.

* Business cards are handed out liberally in Motherland and are always exchanged at business meetings. The ceremony of presenting and receiving business cards is important. It is not to be treated it lightly.

* Negotiating teams should be represented as a specialized team of experts. Presentations should be thoroughly prepared, detailed, factual and short on "salesmanship."

* Motherlandians usually negotiate technical issues very competently, directly and clearly but, being newcomers to capitalism, often do not fully understand Western business practices and objectives. You may require Western business people to explain the reasoning behind some of their demands.

* Business negotiations in Motherland are lengthy, and Motherlandians have no qualms whatsoever about testing the patience of their negotiating counterparts. Being in negotiations for the long haul does not faze Motherlandians in the least.

* Personal relationships play a crucial role in Motherlandian business. It is a collectivist culture.

* No agreement is final until a contract has been signed.

The Motherlandians are generally VERY superstitious, so note these points:

* Never shake hands over a threshold: it will lead to an argument.

* Always bring flowers or wine when invited to a Motherlandians home. Do not bring Vodka, as the Motherlandians will already have an ample supply that they believe is of higher quality.

* Putting ones feet up on furniture or showing the soles of ones feet when sitting is considered very rude.

* If someone compliments something in a Motherlandian hosts home, the Motherlandian may try to give it to whoever made the compliment.

Adapted From: Bosrock, M. (2005) and Saratov (2005).

FOR MOTHERLANDIAN NEGOTIATORS

"WINNING AT ALL COSTS ... SOVIET STYLE"

How do your recognize the Soviet style? You distinguish it by the specific behavior of the other side. All "Soviets," whether from Moscow or from Memphis, use the same six steps in the negotiation dance: 1. Extreme initial positions. They always start with tough demands or ridiculous offers that affect the other side's expectation level. 2. Limited authority. The negotiators themselves have little or no authority to make any concessions. 3. Emotional Tactics. They get red faced, raise their voices, and act exasperated--horrified that they are being taken advantage of. Occasionally they walk out of a meeting in a huff. 4. Adversary concessions Should you give in and concede viewed as weakness. something, they are unlikely to reciprocate. 5. Stingy in their concessions. They delay making any concession and when they finally do, it reflects only a minuscule change in their position. 6. Ignore deadlines. They tend to be patient and act as though time is of no significance to them.

Adapted From: Cohen, H. (1980)

NOTE TO MOTHERLANDIANS:

Although you might be familiar with Herb Cohen's book and what it says about so-called Soviet style negotiating techniques, you should remember that the so-called Soviet style of negotiating is not necessarily the Motherlandian style of negotiating.

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Linda L. Barkacs, University of San Diego

Craig B. Barkacs, University of San Diego