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Why Diamond Was Involved In A Protracted Negotiations (Case Study Sample)


Please read part B in addition to part A and answer the following questions.


  1. Why did Jim Arens, intl VP immediately react negatively about the license in China but positively about the JV
  2. Why did diamond allow itself to be “trapped” into protracted negotiating sessions, most of which required them to travel ½ way around the world to an undesirable location?
  3. If one or more of diamond’s six specific requirements had not been successfully resolved would diamond have continued with the negotiations?
  4. Tom Prebola harbored genuine concerns about accepting the assignment.  If so, why did he accept it?
  5. Was it a wise decision for tom to allow himself to be caught up in all the daily operational details that consumed so much of his time & effort?  Would he have been better off focusing on the strategic issues?
  6. What should tom do the straighten out the problems with customers and materials
  7. Although there was no violence in Jingshan, the Tiananmen square incident re-asserted the militancy of the gov’t and the threat to individual liberties.  Does this affect you strongly enough to stop your return, if you were in Tom’s shoes?


  1. Why was Tom replaced by Charlie?
  2. Charlie made a near-spontaneous decision to sanction the watermelon caper.  Was this a risky decision? What might be the outcome if he ignored it? Objected to it?
  3. How could Charlie give away the value of the scrap metal w/o consultation with his partners?
  4. Why did Charlie feel so strongly about the 10% raise?
  5. If the engine lathes are the source of the quality problems why not replace them with turret lathes?
  6. During the visit to HQ, charlie’s colleagues suggested 5 possible strategies for action. What might be the benefits and shortcomings of each?

Diamond Case
Diamond Power
Part A
The Reason why Jim Arens Reacted Negatively about the License in China but Positively about the Joint Venture
First Jim Arens was not happy about the fact that only one manager of the Chinese Company attended the meeting and the rest were the politicians. The other reason is that getting a license in China was expensive and there was already such a company like theirs already operating in China. Furthermore, it was going to be very difficult in meeting the requirements by the Chinese government to license a foreign company. For instance, one of the requirements is that one of the directors for the company must be a Chinese native. In addition to that, the Chinese government only allowed for a maximum of ten years licensing for the foreign company something that Jim Arens was not happy about. Therefore he opted for a joint venture where they could operate for more than ten years.
The Reason as to Why Diamond allowed itself to be Involved in a Protracted Negotiations
The Diamond Power allowed itself to be involved in long negotiations because they wanted to get a better deal once they signed the agreement of operating a joint venture. These protracted negotiations allowed for the new markets to emerge in the United States. For instance

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