Case 1: Negotiation Between Defibrator (Sweden) and Hindustan Paper Corporation

(India)
Defibrator, a Swedish supplier of pulp mill technology, entered into negotiations with
Hindustan Paper Corporation (HPC), an Indian state-owned enterprise. India aimed to achieve
self-sufficiency in pulp and paper production, and HPC sought advanced technology to support
this objective. After evaluating technologies from various sources, HPC determined that
Defibrator’s systems were the most suitable for their needs. For Defibrator, the deal presented
an opportunity to establish a foothold in India, with the potential for future projects as HPC
planned to build more mills.
In the early stages, both Defibrator and HPC found common ground. HPC was focused on
acquiring technology to advance India’s self-sufficiency, while Defibrator saw the potential for
long-term business by meeting HPC’s needs. Cooperation was strong initially, and both sides
felt that any outstanding issues could be resolved through negotiations.
However, as discussions continued, the negotiation process became more complicated due to
environmental and regulatory differences between Sweden and India. Defibrator struggled to
gather enough information about the infrastructure, financial situation, and technical standards
in India, while HPC had difficulty understanding the approaches and practices of the Swedish
firm. The unfamiliarity between the two organizations created obstacles that neither party had
anticipated.
Defibrator held a stronger position in the negotiation due to the lack of alternative suppliers
that could meet HPC’s technical requirements. This imbalance in power gave Defibrator
leverage throughout the process, allowing them to secure concessions from HPC, especially in
the later stages. HPC, being dependent on Defibrator for the necessary technology, had little
choice but to accommodate many of Defibrator’s demands.
Another complicating factor was the influence of the Indian government on HPC’s decision-
making. As a state-owned entity, HPC was bound by governmental regulations, and any
proposal that deviated from these rules required approval from government authorities. This
slowed the negotiation process, as HPC often had to consult with regulators before moving
forward. Defibrator, by contrast, operated with greater autonomy and was able to make
decisions more quickly, giving them an advantage in pushing the negotiations forward.
Despite the early cooperation, the negotiation reached a deadlock. Unable to agree on key
terms, Defibrator’s representatives returned to Sweden, where they had to reassess their
position and explain the situation to their management. The unfamiliarity between the parties,
compounded by the regulatory hurdles on HPC’s side, caused significant delays. Nevertheless,
both sides resumed discussions after internal meetings. With HPC facing limited alternatives
for suppliers, they eventually accepted Defibrator’s terms, albeit with significant concessions
on their part. The contract was finally signed, securing the deal for Defibrator.
The entire negotiation process took 48 months from the first contact to the final signing of the
contract. The lengthy duration was primarily due to the unfamiliarity between the two
organizations and the need to navigate through India’s governmental regulations and approval
processes. Despite these challenges, the deal was ultimately concluded, though it required
considerable persistence and adaptation from both sides.

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Case: Nigeria (Power and Tender Board - TB)
Power, a Swedish supplier of electric power systems, entered into negotiations with Nigeria's
Tender Board (TB) to supply a much-needed upgrade to the country’s power infrastructure.
Power saw this as a valuable opportunity to enter a new market with significant long-term
potential, while TB aimed to secure reliable technology that would support Nigeria’s growing
energy demands. Though both sides had aligned interests in pursuing the project, the
negotiation process was marked by significant differences in their approaches, stemming from
their respective communication styles and expectations.
At the outset, both parties appeared to be in agreement about the core goals of the project.
Power came prepared with detailed proposals, ready to begin work swiftly. They assumed that
the negotiation would progress quickly once the technical and financial aspects were discussed
and approved. However, TB seemed to approach the process with a different mindset. For them,
the formal technical proposals were important, but equally important was building a sense of
trust and long-term understanding. TB preferred to engage in more informal discussions,
looking to gauge Power’s broader intentions and commitment beyond just the immediate
contract.
This difference in approach became apparent during the communication process. Power’s
representatives tended to give direct, clear responses, expecting straightforward answers in
return. They viewed the negotiation in concrete terms: finalize the details, sign the contract,
and start the project. On the other hand, TB’s communication was more nuanced and less
immediate, often leaving Power unsure of where things stood. While TB sought to ensure that
all parties were fully aligned on a deeper level before proceeding, Power interpreted these
delays as a lack of urgency or perhaps even reluctance to proceed.
The disparity in how each side viewed formal agreements further highlighted the contrasting
approaches. Power, with its focus on efficiency, assumed that once the proposals were in place,
the next logical step was formalizing the contract. They worked diligently to prepare
comprehensive contract drafts, outlining every aspect of the project. But TB wasn’t ready to
rush into signing anything until they had thoroughly established a more personal connection
with the Power team. From TB’s perspective, the relationship was not yet ready for
formalization, as there were still lingering questions about Power’s long-term intentions and
its fit within Nigeria’s unique context.
As time passed, the difference in their views on deadlines and timelines began to cause tension.
Power operated with a sense of urgency, adhering to a strict timeline and expecting TB to do
the same. They believed that delays were detrimental and that decisions needed to be made
quickly to ensure the project's success. In contrast, TB viewed time in a more fluid way. For
them, deadlines were part of a broader process that could be adjusted as the relationship
between the parties evolved. This resulted in numerous delays, with Power growing frustrated
and anxious, believing that the project might fall through, while TB remained unconcerned,
seeing the extended timeline as a natural part of building a stable, long-term partnership.
As the negotiations reached a more formal stage, these differences in priorities came to a head.
Power pushed for finalizing the contract and moving ahead with the project, while TB still had
reservations and wished to further explore certain aspects of the partnership. This led to a
deadlock, with both sides feeling that the other was not fully committed to the same goals.

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Power began to worry that TB’s reluctance to finalize the deal indicated that they were losing
interest, while TB felt that Power was too focused on formalities and not enough on
understanding the broader implications of the partnership.
Realizing that the impasse was due to their differing approaches, Power decided to take a step
back and reevaluate their strategy. They began to spend more time on informal relationship-
building, participating in social events and casual discussions with TB’s representatives.
Through these efforts, they gained a deeper understanding of TB’s concerns and cultural
expectations. Over time, TB began to feel more comfortable with Power’s commitment to
Nigeria’s long-term development, which allowed the negotiations to resume in a more
constructive manner. Both parties made compromises, with Power agreeing to make some
adjustments to their offer and TB moving forward with formalizing the contract.
The negotiation, which Power had initially expected to conclude in a matter of months, ended
up taking 36 months from start to finish. Much of this delay was due to the need for both sides
to adapt to each other’s expectations and communication styles. Power’s shift from a purely
formal, efficiency-driven approach to one that incorporated more relationship-building
ultimately helped move the process forward and secure the deal.