Foreign direct investment by enterprises faces numerous problems that, if not addressed, may result in the company's failure in the new market. Granite Company is exposed to such risks as it expands into new areas. These forces demand its closure in international markets since it is considered as an environmental destroyer. The forces are environmental groups who have forced it to abandon its Honduran project. Activities in Costa Rica have faced comparable obstacles, although the current administration appears to be impartial in its examination into the company's actions in the country. However, the company needs to put up strategies to ensure survival in the new market as its operations have more good than bad to the citizens. These can only be achieved by locking out environmental groups and convincing the government of its importance to the country.
Needs, Wants, and Objectives
The company investment in Costa Rica has been facilitated by the many preferences of the country; they include:
Availability of arid land which is poorly managed by the locals
High unemployment and poverty levels in the country
Economic development of the nation
Increase the foreign investment in the country
Protection of its environment by the company while doing its duties.
Our objective is to operate in the country and ensure the development of both the nation and uplift the poor locals who are struggling with jobs by leasing their lands hence they get income and also employing them in the plantations and the factory.
Detailed Information about Granite Corporation Activities in Costa Rica
The company has been operating in the country through the invitation of M, Kohl who was then working in the Costa Rican Forest Industry Association. M. Kohl then has considerable influence in the government, and the company enjoyed protection in the new market. The country was arid caused by poor land management by the local farmers through overgrazing which led to soil degradation. The company aimed to come into the country and to lease the lands to plants Gmelina trees which would be in line with the government campaigns for reforestation. These were done with the approval by Ministry of Natural Resource (MNR) with great help by M. Kohl. The company plan was to lease land would provide income to the small landowners and the chip mill, and port would also provide jobs for the locals in Costa Rica. However, 1994, election led to a new government which was led by president Jose Maria Figueres who importantly was elected on a platform of economic development in alliance with nature. In the government, the M.Kohl family lost influence making the company face considerable opposition from the new management of the MNR and the environmentalists particularly AECO. The minister and the environmentalist's campaign against the activities of the company making the president not to ignore the public outrage but appoint a commission to investigate the company activities and plans in Costa Rica.
Relevant Industry Information
The company in the industry is faced with many challenges which are competition, foreign country policies, and mainly environmentalists. It deals with cutting down on trees as the principle products it makes are paper, pulp, and packaging. The environmentalist campaign against deforestation and this brings conflicts of interest between the company and the environmental groups in all the countries it operates. In Costa Rica, the AECO claims that the company is destroying the environment through its activities. Formally, the company was planning to work in Honduras but was forced to close down the project prematurely due to the pressure from the environmentalists which had a negative attitude toward US companies and thought it would deplete valuable Honduran forests at the expense of the Hondurans. The environmental groups paint the company as has a heartless global corporation which is only concern with making profits and has been the reason it has been looking for foreign markets to carry out its activities.
Detailed Information Regarding the Costa Rican Government
The government has been to the company even before the new election. It has seen the company as a foreign investor who brings many good things to the country like high revenues from taxes and jobs for the locals. Despite the environmental issues the environmentalists' claims the company will bring more harm to the state, it is only the government which has done an unbiased investigation regarding the affairs of the company. Therefore, the Costa Rican government is the only savior of the company after the election of the new president.
Assessment of the Other Party's likely Needs, Wants, and Objectives
The government and the environmental groups have almost similar needs from the Granite Corporation. However, the government seems to favor the activities of the company whereas the environmental groups are anti-Granite Company. The requirements include:
Protection of the environment by the company and it becomes liable for any mistakes it makes in future.
Employment for the local
Increase in the foreign direct investment and economic development of the country.
The government and Granite Company report have the same finding whereas the AECO findings are different and exaggerated with the aim of kicking the company out of the country. The objective of the government is to encourage foreign investment to benefit the citizens and the state but also the firm to care for the environment.
Strengths and Weaknesses of Granite Company Compared To the Other Party
The company has many advantages as it has been earlier involved in such situation in Honduras with the environmental groups. It is now aware of the dangers the environmentalists pose to their existence in Costa Rica. These make the company be prepared to deal with the lobby groups as they aim to stop their operations in the country. Additionally, the movement seems to be unbiased thus wanting the company to operate in the state. The weakness of the company is that it has no one in the government to support their activities. Also, the environmental groups have a significant influence on the Presidency as they helped the president win the elections.
Specific Goals for the Negotiation, Range Of Options, Company BATNA
The goals of the company in the talks are to convince the government that they are doing more good than bad to the country and also show that the lobby groups have ill-motives in their operations. The BATNA agrees with the government requirements as they are almost same as what the company needs.
Specific Negotiation Strategies and Tactics
The company is using extreme demands followed up by small, slow concessions negotiation strategy and tactic. These are seen when it does not want to talk directly with the environmental groups but accepts their presence in the meeting with the government to set new agreements. The firm must lock out the AECO and other environmental groups to secure their existence in the country.
What-If Contingency
What-if they do not want to meet our expectations?
What-if they force us to talk to AECO and other environmental groups directly?
What-if they listen to the advice of the environmental groups?
What-if they offer us extreme conditions to operate?
