DELTA CASE English

DELTA
NEGOCIATION CASE
© Copyright : Xavier BOUZIAT
1
1) DELTA COMPANY : GUIDELINES FOR THE DEVELOPMENT OF OPERATIONS
DELTA is a growing conglomerate that includes four major subsidiary companies,
each of which is well regarded in its industry. Each subsidiary is established as a
separate company and the Chairman of each of them is a member of the Executive
Board of DELTA. The four subsidiaries and their respective industries are:
FUMA COMPANY
Nuclear research for domestic applications, e.g. smoke alarms, heating system.
ATIS COMPANY
Manufacture of high-precision machined industrial parts: for example, diesel
crankshafts, parts of submarines and boats.
VALCO COMPANY
Engravings and manufacture of precision and peak plates.
EXCEL COMPANY
Consumer products, for example, microwave ovens, microcomputers.
Each subsidiary has grown steadily over the years. This growth has already
overloaded the existing facilities of each sub-company and the anticipated future
growth has made it urgent to immediately consider new facilities.
A few years ago, DELTA identified a large area of land, which was considered ideal for
the expansion of subsidiaries. The land was not available in full, so parcels of land
were bought little by little when they were released. The actual purchase of each
parcel was done by the subsidiary which had the best cash position at the sales time.
Last year, the last parcel was acquired and now the entire land is owned by
subsidiaries. Buying the land this way resulted in property distributed rather
randomly between subsidiaries. (See the map in the annex.)
The development plans of the subsidiaries that have been approved by DELTA will
require a configuration of the different parcels of the current property. Each
subsidiary has carefully studied the site and developed specific plans for the parcels
necessary to harmonize the requirements of the expansion.
According to the decentralization policy that characterizes DELTA, the task of

redeveloping the land into suitable parcels has been delegated to the subsidiaries. As
a result, the President of each subsidiary appointed a key group of employees and
assigned them responsibility for completing the required transactions. The Executive
Board has clearly announced, however, that it is counting on the most profitable land
use possible.
2
Your group will assume the role of the group of employees of one of the subsidiaries
especially appointed by its president to obtain the particular ground necessary for its
development. You will be given the target configuration of the parcel you want. Your
job will be to conduct the necessary transactions with the other three groups of the
other subsidiaries. A general meeting will be held shortly to facilitate transactions.
Certain rules concerning these transactions have been established. Here they are:
1- Parcels of land can be bought, sold or traded (against each other or with a land-
based stimulus).
2- All the parcels are nominally estimated at 100 000 € each. This is a purely nominal
figure based on the average purchase price actually paid during the last ten years
for the separate parcels.
Each parcel owner is free to set his true value. One or more of the parcels owned
by each subsidiary may be expected to be desired by one or more of the other
subsidiaries, making the parcel much more expensive than its nominal price.
3- DELTA's Executive Board has made it clear that they will not approve the sale or
lease of the land to an outside company. Thus, it is not possible to sell or
exchange parcels with outside organizations either now or in the future.
Your company has been allowed to spend a certain amount of money to get the
land you need if you have to. The amount varies with the level of profits
generated by each company. In the past, all companies have maintained a level of
profit roughly equal to the exception of EXCEL, which has consistently achieved
higher profits. The instructor will indicate to each company the amount of money
it is authorized to spend. A company can not trade when it is in a deficit situation.
You can, of course, get cash by selling the parcels you own. Your instructor will
maintain a current balance for each company and will not allow transactions that
may cause a deficit.
Your group will also have to keep their own documents. The instructor will give
each group of employees information about the desired parcels of land.
3
Planning guide
(to fill in by the group before the negotiations).
Company observerd : ----------------------------------------------------------------------------------------------------
- Does your group have a basic strategy to achieve its goals?

o If so, explain your strategy briefly.
o If not, what effect do you think a lack of strategy could have?
- How do you think the members of your group will behave during the general
meeting? Check off those who are concerned.
a) Every man / woman for himself / herself d) Confidence
b) Bargaining agents e) Total honesty
c) Peacemakers f) Other
- Do you think your group will achieve its objectives? Why or why not?
- Who has the most influence in the group? What effect will its influence have?
4
Feed-back guide
(to fill in the group after the negotiations).
1) Did the group retain or distort information in any way during the general meeting?
2) If your group had a strategy, was it followed when the meeting started?
Why or why not?
3) What influence did the group have on the other groups during the general meeting?
How can you explain it?
4) If private meetings were held in each group or between groups, how did they try to
resolve their differences?
5) Other observations
5
RESIDENTIAL AREA
HIGHWAY
A B C D
EXCEL EXCEL VALCO FUMA
E F G H
VALCO FUMA ATIS FUMA
I J K L
ATIS ATIS VALCO EXCEL
M N O P
EXCEL ATIS FUMA VALCO
RAILWAYS

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DELTA

© Copyright : Xavier BOUZIAT

According to the decentralization policy that characterizes DELTA, the task of

Company observerd : ----------------------------------------------------------------------------------------------------

- Does your group have a basic strategy to achieve its goals?

a) Every man / woman for himself / herself d) Confidence

b) Bargaining agents e) Total honesty

EXCEL EXCEL VALCO FUMA

VALCO FUMA ATIS FUMA

ATIS ATIS VALCO EXCEL

EXCEL ATIS FUMA VALCO

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