Assignment task: Black Gold Inc. is an oil company from the country Hyrak which extracts crude oil from the earth. Black Gold Inc. signed a 10 year agreement with Golden Gasoline Inc. from the country of Caribana which stipulated that Black Gold Inc. would ship 200,000 barrels of crude oil per year to Golden Gasoline Inc. In return, Golden Gasoline Inc. would ship 100,000 barrels of refined gasoline to Black Gold Inc. Both companies are also the sole suppliers of gasoline products to their respective populations.
Golden Gasoline Inc. is the largest customer of Black Gold Inc. and the sole supplier of refined gasoline. Black Gold Inc. has the machinery to extract crude oil but lacks machinery to refine the oil for use.
On the other hand, Black Gold Inc. is the sole supplier of crude oil to Golden Gasoline Inc.
The agreement expires this year and due to increased operational and processing costs, Golden Gasoline Inc. is asking Black Gold Inc. to increase their shipment quota from 200,000 to 300,000 barrels per year and in return Golden Gasoline Inc. will continue shipping the same amount of refined gasoline (100,000 barrels) per year back to Black Gold Inc.
Black Gold Inc. has agreed to review the proposal only if Golden Gasoline Inc. also agrees to increase its shipping quota (from 100,000 to 200,000 barrels of refined oil). Golden Gasoline Inc. is adamant that this is not possible because the increased cost of production has been affecting them much more than Black Gold Inc.
The business culture in the Hyrak is very formal and male dominated. Additionally, it is believed that experience and age make for better business management. They value relationships and are more comfortable with long term associations.
Golden Gasoline Inc. is preparing a negotiation team to the 26 hour travel to Hyrak to negotiate a deal.
With respect to the above case please answer the below questions:
Question 1: What are the interests of Black Gold Inc in this negotiation?
Question 2: What are the interests of Golden Gasoline Inc. in this negotiation?
Question 3: Discuss the factors that Golden Gasoline Inc. should take into consideration when selecting members of the negotiation team and suggest appropriate actions based on these factors.
Question 4: Discuss how each company should approach the bargaining table and suggest steps for reaching a mutually beneficial outcome based on the underlying facts?