Examination Method: Free slot.

Time Permitted: 2 hours

Instructions:

ï Make sure you have three blue examination booklets before you commence your examination. Write your ID number at the top of this Examination Question Sheet and on each examination booklet before you commence your examination.

ï All answers must be set forth in examination booklets in the manner instructed below.

ï Return this original Examination Question Sheet with the examination booklet entitled ìNegotiating Problemî (see explanation below). Examinations not including Examination Question Sheets will be penalized.

A. Short Answer (5 points per response).

Please identify (by source) and explain the meaning (in the context of negotiations) of 7 (only) of the 8 negotiation related terms set forth below which were discussed in our course materials. Please do not use more than one blue book page for your explanation of each term and place all seven explanations in a single examination booklet entitled ìNegotiation Terms.î

1. Naniwabushi 5. Competitive Irrationality

2. Strategic Negotiation Process 6. Pregiving

3. BATNA 7. Winnerís Curse

4. Positional Bargaining 8. Objective Criteria

B. Short Essay (15 points per response).

Please write a short essay on two of the following three topics. Please do not use more than four blue book pages to respond to each question (8 pages in total) and place both short essays in a single examination booklet entitled ìShort Essays.î

1. Compare and contrast the approaches to negotiating discussed in ìGetting to Yesî and ìNegotiating Rationallyî identifying the key elements of each approach. Explain which approach to negotiations you prefer and why.

2. Do you agree with Marchís observations regarding Japanese nonverbal communication? Be specific as to the types of non-verbal communication methods discussed and your agreement or disagreement therewith.

3. Discuss Marchís observations regarding Japanese attitudes towards lawyers and contracts. Do you believe his observations are accurate? Try to identify circumstances in which they might not be accurate and relate these situations to how a lawyer should act in negotiations with Japanese.

C. Negotiating Problem: Essay (35 points).

You are the Associate General Counsel-Japan for Wall Brothers Studios (ìWBSî) a Fortune 100 company in the entertainment and communications industries. WBS owns a major movie studio, theme parks in several locations around the world (including Japan) and major cable television and broadcast franchises. The President of the WBS (Mike Castle, age 58) is a business genius who has restored WBS to the top of the entertainment industry through careful acquisitions, a deep understanding of WBSís core business in cinematic animations and a strong sense of what the people want. WBS is sitting on a pile of cash looking for good business opportunities. Recently, the President has sent you a highly confidential e-mail note in which he wishes you to analyze the following situation:

Last weekend, while attending the International Virtual Reality Exposition in Berlin, Mr. Castle ran into Minoru Goh (age 70), the Chairman and Chief Executive Officer of Go! Corporation, the leading animation and game software company in Japan and owner of the largest collection of animation (including such dominant characters as ìRocket Boy,î ìBario Brothers,î ìRinchanî and ìMikiî) and souvenir goods and related intellectual property in Japan. Mr. Goh and Mr. Castle have been friends and shared professional interests for more than 20 years since they collaborated on the translation of WBS classic animations into Japanese for distribution by Go! Corporation in Japan. Although WBS has since entered the market directly, Mr. Castle and Mr. Goh and their corporations have maintained good relations and cooperated on various projects in the interim. After the conference, Mr. Castle and Mr. Goh met for a drink.

During their private meeting, Mr. Goh indicated to Mr. Castle that he was considering selling his majority ownership interest in Go! Corporation. He noted that his family had no interest in running the business (his son is a practicing doctor and his daughter (currently attending the Eastman School of Music) plans to become a concert pianist). He indicated that of course many other Japanese companies would be interested in his business, but that he wanted to find a good ìhomeî for his animation characters and that he has always respected the manner in which WBS protected maintained the image and protected the value of its intellectual property. Mr. Castle thanked Mr. Goh for his consideration and indicated that he believed that the board of WBS would likely believe the fit an extremely good one. He suggested that a small WBS team (no more than 4 persons) meet with a small Go! Co. team (which will comprise Mr. Goh and three of his colleagues) in Tokyo to discuss the possible terms of the acquisition.

Approximately 30% of Go! Co.ís 100,000,000 shares are listed (TSE) with the remaining 70% owned by Mr. Goh and his family (50% by Mr. Goh and 10% each by his children). Mr. Goh believes that his children would like to sell their shares and he would like to retain a 20% interest for his estate. The current price of Go! Co. shares is ¥1000 per share. Approximately 10% of the listed stock is owned by Go! Co. employees. Go! Corporation has three major divisions: (i) the film division which produces animated films and television for the adult and childrenís entertainment markets; (ii) the computer game and entertainment division which produces and markets game software and related products; and (iii) the publishing division which produces Japanese ìmangaî magazines for all ages. Mr. Gohís primary concerns in connection with the acquisition transaction appear to be: (i) to ensure the continuance and development of his animation characters and to promote their internationalization by inclusion in major theme parks throughout the world; (ii) to ensure that Go! Co.ís employees will be able to continue their careers in a stable corporate environment (Go! Corp. has two company unions: the fickle ìAnimation Unionî and the ìGeneral Employees Unionî); and (iii) that acquisition by WBS will be viewed positively by the Japanese business community and by Japanese society generally.

WBSís management is divided into five major corporate divisions: (i) Finance (headed by Mr. Alpha, a former accountant and investment banker who many refer to as a ìbean counterî but who is a favorite of shareholders because of his careful control and promotion of corporate financial performance), (ii) Sales and Marketing (headed by Ms. Beta, known for her ability to merchandise just about any film related material from fake shrunken heads (ìInvaders of the Lost Pyramidsî) to spooky aliens ( ìAlien Encountersî), (iii) Human Resources (headed by Ms. Gamma), a personnel specialist famed for her ability to work closely with animators and maintain smooth relations with office employee unions), (iv) Operations (headed by Mr. Delta, a former NASA engineer who is principally responsible for the operation of WBSís theme parks and film studios), (v) Creative Services (headed by Mr. Epsilon, a film and creative arts director who has become world famous for his revival of WBSís animation studios and restoration of its classic films), and (vi) General Services (which includes the legal division and miscellaneous other staff functions).

Mr. Castle has indicated that he strongly wants to achieve the acquisition of Go! Co., not only because they was add an impossible to duplicate addition to WBSís operations in Japan (which already is a major cash cow), but also because he believes that Go! Co.ís game and virtually reality technology will be invaluable to WBS in its planned operations around the world. He shares Mr. Gohís vision of internationalizing Go!ís characters and employing its game technology in theme parks worldwide, but is not quite as happy with Go! Co.ís publishing division which appears to contribute little to Go!ís bottom line and includes the largest number of underutilized employees. In any event, he was these first meetings to be positive and go smoothly whatever the eventual outcome of talks with Go! Co.

Mr. Castle has asked you to write a short (no more than 10 bluebook pages) memorandum addressing the following three points:

(a) which senior officers of WBS should be included in the group to travel to meet Mr. Goh in the first meeting next week and why each officer should be included (8 points);

(b) which topics should be introduced for discussion (and which topics should be avoided) at this meeting and why each should be included or excluded (8 points); and

(c) a brief outline of a (coherent) negotiation strategy for dealing with the Go! Co. acquisition drawing on your famed negotiation talents and familiarity with the mysterious East (14 points).

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