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Instructor’s Notes on Text Cases
INTC-81
CORCOVADO HOSPTIAL CHIEF FINANCIAL OFFICER (B)
You will be playing the role of the Chief Financial Officer for Corcovado Hospital, a large private
hospital located in Rio de Janeiro, Brazil. You are working with your medical staff in the final
negotiations for a Magnetic Resonance Imaging (MRI) system for installation in your hospital being
offered by an American company, General Medical, Inc. (GMI). A sales representative at GMI has
submitted a bid ($1.5 million) for the system that may or may not be the best solution to your purchasing
problem.
You consider the price quoted by GMI to be out of line with their Japanese competitors. Indeed, a good
friend working for Hokkaido Electric says his company will beat any price GMI offers. You recognize
that GMI’s products are superior, but you also know that GMI is trying to beat the Japanese and should be
willing to make substantial price concessions.
Of the terms and conditions included in the initial bid, you feel that three are critical. First, in recent
months GMI has had difficulty meeting delivery dates. Therefore, the late delivery penalty will be an
important issue during the discussions. Second, you believe that it is imperative that your vendors bear
the risk of currency fluctuations, and therefore the agreement should be written in reals, not dollars.
Indeed, latest forecasts are for the real to decline during the upcoming year.
Your firm wishes to stay as far away as possible from American-style legal disputes, so you see a third-
party arbitration clause as an essential part of the contract.
Another issue of concern is an internal dispute between your Radiology Department Manager and the
Chief Radiologist. The latter wishes to order two MRI systems right away, and argues that the current
patient load justifies the aggressive purchasing. The Department Manager prefers to see how this first
GMI purchase works out before committing to a second system.
You have thirty minutes to plan bargaining strategies with other members of your negotiation team. Feel
free to use part or all of the information provided above in shaping your strategies. Create additional
arguments to bolster your position if you so desire. It is important that you play the assigned role to the
best of your abilities in order to maximize the learning of all participants. Included in your materials will
be some special instructions about “acting” Brazilian. Have fun with these—try to make your portrayal as
realistic as possible. Although you can exchange information from these forms, please do not exchange
forms with the other members of your negotiation team. You will have one hour to reach an agreement
with the representatives of General Medical, Inc. You may make notes on these forms and ask questions
if clarification of the instructions is needed.
(attach price quotation, purchasing objectives, negotiation style instructions)
Instructor’s Notes on Text Cases
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CORCOVADO HOSPITAL CHIEF RADIOLOGIST (B)
operational efficiency at your hospital, but some of the newer cardiovascular imaging product options will
Instructor’s Notes on Text Cases
CORCOVADO HOSPITAL RADIOLOGY DEPARTMENT MANAGER (B)
You will be playing the role of the Radiology Department Manager for Corcovado Hospital, a large
listed a second MRI in her/his Purchasing Objectives (see attached).
You see buying two MRIs now as a big potential problem. Although GMI has a wonderful reputation,
you do not know any of their personnel well. A new GMI sales representative seems to call on you every
six months. Your preference is to perhaps buy one system and use it for at least six months before buying
another. That would give your financial and technical staff some time to get to know the GMI people.
arguments to bolster your position if you so desire. It is important that you play the assigned role to the
best of your abilities in order to maximize the learning of all participants. Included in your materials will
be some special instructions about “acting” Brazilian. Have fun with these—try to make your portrayal as
realistic as possible. Although you can exchange information from these forms, please do not exchange
forms with the other members of your negotiation team. You will have one hour to reach an agreement
Instructor’s Notes on Text Cases
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Price Quotations
Deep Vision 2000 MRI (basic unit)
$1,200,000
Product options:
2D and 3D Time-of-flight (TOF) angiography for capturing fast flow
150,000
Flow analysis for quantification of cardiovascular studies
70,000
X2001 Software Package
20,000
Service contract (2 years normal maintenance, parts, and labor)
60,000
Total price
$1,500,000
Standard Terms and Conditions
Delivery
6 months
Penalty for late delivery
$10,000/month
Cancellation charges
10% of contract price
Warranty (for defective machinery)
parts, one year
Terms of payment
COD
Instructor’s Notes on Text Cases
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Corcovado Hospitals Purchasing Objectives (B)
Two (2) Deep Vision 2000 MRIs
2,000,000 reals
2D and 3D TOF Angiography (2)
240,000 reals
Flow Analysis (2)
110,000 reals
Service Contract (3 years)
97,000 reals
TOTAL PRICE
2,477,000 reals
Delivery
3 months
Penalty for late delivery
$12,000/month
Cancellation charges
2% of contract
Warranty
parts and labor, 2 years
Terms of payment
4 equal payments:
1st at delivery,
2nd at start-up,
3rd and 4th at 90-day intervals
Third Party Arbitration Clause
included
Instructor’s Notes on Text Cases
Final Contract (B)
Deep Vision 2000 MRI
Product Options (circle those selected)
Angiography
Flow analysis
X2001 Software
TOTAL Price $ ______________
Service Contact (list conditions)
_________________________________
_________________________________
Price $ ______________
_____________________________________________________________________
Terms and conditions
________________
Delivery
________________
Penalty
________________
Cancellation Charges
________________
Terms of Payment
________________
________________
Warranty
Parts _____ Labor _____ Years _____
Arbitration clause
Yes _____ No ____
_____________________________________________________________________
Signatures
_________________________________________
_________________________________________
Corcovado Representative
General Medical, Inc. Representative
Instructor’s Notes on Text Cases
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BRAZILIAN NEGOTIATION STYLE INSTRUCTIONS
Case 4-4 National Office Machines – Motivating Japanese Salespeople: Straight Salary or
Commission?
The problem of changing management methods and also motivating salesmen in another culture is
highlighted in this particular case. The entire Japanese system, their basis for motivation, is so different
from the U.S. method and system that major problems can arise in changing the basis for compensation.
Several questions should be emphasized. Should a firm change its method of operation to blend more
closely with the Japanese, since to change the Japanese culture is such a difficult problem? Or should the
U.S. firm force a change in motivation methods because it realizes that Japanese culture is already
Instructor’s Notes on Text Cases
When Westerners study Japanese culture they sometimes think of it as mystical, beyond the intellect.
There is, however, nothing particularly mystical about Japanese culture. It can be explained logically. But
the premises are different than those of western logic. The first premise in the Japanese esthetics of
behavior is concealing the self. From a Japanese viewpoint, western culture appears to be developed on
the principle of being conspicuous. As in other East Asian countries self-assertion is not a virtue in Japan.
1994, p. B-1.)
Lifetime employment, promotion through seniority and single-minded company unions—are the
foundations of Japanese management crumbling? Evidence seems to point toward significant trends in
Instructor’s Notes on Text Cases
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Pertinent Facts
National Office Machines of Dayton, Ohio entered into a joint venture with Nippon Cash Machines in
Tokyo, Japan (N.A.B.M.C.). NCM is the oldest cash register manufacturer in Japan. But they have been
steadily losing their market share.
considerable due to the nature of the market system in Japan. Essentially, retailers do business with those
wholesalers or manufacturers whom they perceive themselves as owing favors to. Competition means
very little to them. Therefore, it is questionable whether salesmen could break down the ties necessary to
secure new sales if the compensation plan was instituted.
Comments on NCR in Japan
A pioneer in the development of commission selling in Japan, NCR has some 600 salesmen “on quota”—
with most of them in the running for top salesmen honors. “The Commission system is considered as
important an incentive there as in the United States and elsewhere,” a company spokesman said.
“Japanese NCR personnel currently in Dayton for sales seminars are of the opinion that the commission
Other Sources
The professor may want to have students review the following articles for a discussion of changing trends
in employment and human resource management in Japan:
Instructor’s Notes on Text Cases
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Despite our best analyses then, it appears (albeit from the popular press) that the “try everything”
might be experimented with around the world?
2. The AIDS problem in the United States is relatively more under control. Education levels and
3. It’s hard to imagine distributing condoms during Mardi Gras in New Orleans or at the latest rock
concert. It’s also hard to imagine a barber engaging a customer in a conversation about safe sex here
in America. But the key with this question is to promote a creative discussion among your students on
these issues. During class you might ask, “If these approaches won’t work in the U.S., what might
work?” You might also ask how research should be conducted on these issues. Certainly, the methods
4. The key is for LIG/Durex to work with local health officials in developing education and condom
Useful associated articles:
David Lamb, “Vietnam Seeks to Modernize Its Methods of Birth Control,” Los Angeles Times, April
11, 1998, page A2. Condoms are being smuggled in from China.
Marilyn K. Nations and Maria Auxiliadora de Souza, “Umbanda Healers as Effective AIDS
Educators: Case-control Study in Brazilian Urban Slums (Favelas),” Tropical Doctor, Supplement 1,
1997, pp. 60–66. This article provides an in-depth discussion of the problem of AIDS in Brazil and
the successful testing of research-based, locally produced education programs.
Teresa Poole, “China Starts Chain of Condom Shops,” San Francisco Examiner, March 29, 1998,
page E7. LIG/Durex is investing $3 million to build a plant in China.
Gary A. Richwald and Jane Baeumler, “Condoms Can Dramatically Reduce the Risk of Infection,”
Los Angeles Times, April 6, 1998, pp. S1 and S10. Provides latest information about problem in U.S.
“Addressing Condom Supply and Demand in PEPFAR Programs,” https://www.usaid.gov/what-we-
do/global-health/hiv-and-aids/technical-areas/addressing-condom-supply-and-demand-pepfar , July
26, 2017.
