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Case
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Reference no. 9-895-004
Published by: Harvard Business Publishing
Originally published in: 1994
Version: 10 September 1996
Length: 8 pages
Data source: Field research

Abstract

The Polish government is privatizing Cementownia Odra, a cement firm. Tomasz Budziak, a team leader, is negotiating on behalf of the Polish Ministry of Privatization. Hans-Hugo Miebach, owner of a German cement company, has made an attractive offer, but a deal hinges on several issues concerning potential liabilities, a Polish tax credit, land acquisition, and the import of refuse-derived fuel. The case is designed as a simulation in which students actually negotiate, either as Budziak or Miebach. More specifically, the simulation provides students with experience in deal structuring and crafting agreements with contingent arrangements. Provides general information on the Odra negotiation. The simulation involves a negotiation in which the need to make contingent arrangements arises naturally. For both Budziak and Miebach, there is uncertainty, sometimes quite substantial, about the extent of liabilities, the likelihood of a tax credit, and the possibility of acquiring requisite quarry land. Students learn an important lesson: differences in beliefs about the outcome of events can be exploited for joint gains.

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Abstract

The Polish government is privatizing Cementownia Odra, a cement firm. Tomasz Budziak, a team leader, is negotiating on behalf of the Polish Ministry of Privatization. Hans-Hugo Miebach, owner of a German cement company, has made an attractive offer, but a deal hinges on several issues concerning potential liabilities, a Polish tax credit, land acquisition, and the import of refuse-derived fuel. The case is designed as a simulation in which students actually negotiate, either as Budziak or Miebach. More specifically, the simulation provides students with experience in deal structuring and crafting agreements with contingent arrangements. Provides general information on the Odra negotiation. The simulation involves a negotiation in which the need to make contingent arrangements arises naturally. For both Budziak and Miebach, there is uncertainty, sometimes quite substantial, about the extent of liabilities, the likelihood of a tax credit, and the possibility of acquiring requisite quarry land. Students learn an important lesson: differences in beliefs about the outcome of events can be exploited for joint gains.

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