My social negotiating dilemma?

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My negotiating dilemma::confused:

One of my clients was a South Korean company established in the Netherlands. The sales targest they had been given by the headquarters in Seoul were very high. To help them reach these targets they hired an advertising agency. The agency went to work and came up with a total media campaign which the South Korean company accepted and allowed to be set in motion. One ingredient of the campaign was a simple but innovative slogan that quickly caught on.

The advertising agency continued the campaign, which appeared to maintain its success. The initial euphoria within the company had, however, evaporated. Its mangers thought the agency's bills were too high, not only because the agency had been with them for two years, but also because they were suspicious about the actual hours that the agency was spending on producting the advertising. They knew it was difficult to check on the time needed to come up with brilliant ideas, but still they felt that the Dutch were taking advantage of the situation. As I discovered later, a comment which was frequently heard at the top of the company was: "Yoy have to be careful with those Dutch."

The Korean company started to withhold payment. The director of the Dutch saw this as a typical tactic of the Koreans to get lower prices. He shared the view held by some buisnesses that Koreas easily breach contracts, a perception that usalyy comes abaout becaouse people are generally unaware of how Koreans interpret the word "trust". Having tried to explain this to him, it was not really a surprise to hear from the Koreans that they intended to break their contract with the agency. I told them it could damage their name in the market if they did so, and reminded them that all the slogans used to promote their products remained the (intellectual) property of the advertising agency.

Well, the agency threatened to take the Korean company to court to recover the money it was owed. They did so, despite being eager to contiune with the contract. Losing it would mean disater for a company that had only started up a few months before getting the Korea contract.

A meeting took place between the two sides without my presence. During it the Koreans made it clear that they were not going to pay. The young manger representing the agency told the Koreans that they would not be allowed to use the slogans any more if the contract was terminated.

The Korean management called me in and asked me to help.

I had a dilemma. It was in my clients' interest to continue the contract. Breaking it would mean putting an end to the whole advertisement campaign that they needed so much (since they were new in the market). The Dutch had good arguments for the amounts they had charged and were really afraid of losing the contract. If the advertising agency started legal proceedings, the Koreans would have no chance of winning the case.

My questions:

1. How would you describe the contrast between the South Koreans and the Dutch when they are doing business?

2. How do you think the dilemma could be resolved?
#dilemma #negotiating #social
  • If the Dutch have good arguments for the billed hours and have run a successful campaign I wonder why the Koreans are balking to renew the contract. Perhaps they think now the ball is rolling they should be billed for less agency time.

    The time to do that is when the contract comes up for renewal - not in the middle. The only way they could win is to prove breach of contract, and it does not appear to be the case. Simply withholding payment to get lower fees will probably not fly in any court. A contract is a contract.

    I will refrain from using cultural generalities, (but to be frank,I have dealt with a businessman from Korea in the past who did the same breach of contract stall tactic.) but if it is the nature of this particular company to do it now - what is to stop them from trying it again?

    Has the Ad agency considered just selling the intellectual property to the Korean company and be done with it? It looks like it may be the viable last win-win option.

    And it would damage their company reputation. At least in getting another ad agency to work with them.

    @Newbieee - Better? :rolleyes:
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  • Profile picture of the author Newbieee
    wow wow wow.

    guys, you would want to space out your para every once in a while at least.

    like what im doing.

    one block of words is not reader friendly, like for now, i didnt even read what u guys wrote.

    my eyes are crossing. lol.
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    Pain is a perception, so is defeat & happiness!
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