Communication, Negotiation, and Decision-Making

Communication, Negotiation, and Decision-Making

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The Wahaha Group and Danone Group combined forces in 1996 forming Chinas largest beverage company. This led to the end of a trademark dispute which was experienced for a long time. The Joint Venture which goes by the name Wahaha Joint venture was established by Danone Group, Hangzhou Wahaha Food Group Co. Ltd and Bai Fu Qin Ltd. Danone group in 1997 bought Bai Fu Qin’s interests and thus gained full control of the Joint Venture having 51% shares.

The problem in the joint venture that led to conflict between the two companies is that Wahaha group in 2000 developed more companies which were outside the joint venture and went ahead to sell product which were similar to the ones retailed by the joint venture. To add on this, it used the Joint Venture’s trademark. They faced objection from the Danone Group which sought purchase of the non-JV companies.

Both companies had differences in understanding of their roles and responsibilities in the venture. When Danone got a higher percentage of ownership of the Joint venture, the Wahaha group felt cheated. Although Danone was the highest shareholder of the venture, the day-today management was carried out by a majority the employees of the Wahaha group. This made them feel entitled to start other non-JV companies and use the venture’s trademark. Danone group on the other hand felt being the majority shareholder with 51% shares, should be the ones in control and that the Wahaha Group went against the contract by not consulting them before using their trademark.

An aspect of organizational culture affected this perspective. Most of the Wahaha group employees being in control of the day-to-day activities of the organization led them to have the thought of making decisions on their own without consultations. They had been used to being in control and thus did not find a problem with this. The organizational structures and responsibilities were thus not clearly stated in this case which led to the controversy.

In such a set-up, a lot of conflicts can arise. As a leader, I can handle the conflict in a variety of ways. First is by acknowledging the conflict. According to Brubaker et al (2014), ignoring the conflict leads to anger buildup so acknowledging the conflict and trying to solve it as soon as it arises will save the venture from a lot of harm later on. Second, there is the need to allow the two venture groups to voice their opinions and concerns about the conflict without any interruption (Luthans & Doh, 2018). In this case, I would ask questions to seek more clarifications and avoid the temptation of jumping into conclusions. After seeking clarity, I would engage every team member on the possible solutions to the issue and when we reach to one that we all agree with, we would celebrate it as a team. This celebration can be in form of a congratulatory message, an afternoon off or anything else that can make the team feel appreciated for the effort the put in.

In conclusion, it is clear that the Joint Venture was formed without clear statement of the rules and regulations as well as the consequences of the venture. The Wahaha group felt cheated and hence went ahead to make moves that would be of benefit to them as they felt entitled to it. These issues can lead to a lot of conflicts in the organization. The conflict can be constructive if dealt with and managed quickly and directly. By respecting that conflict between people and groups do happen and ensuring it is managed as soon as it happens helps maintain a healthy team atmosphere. The key to managing team conflict is remaining open to the ideas of people, their assumptions and beliefs.

References

Brubaker, D.,Noble, C., Fincher, R., Park, S. K. Y., & Press, S. (2014). Conflict resolution in the workplace: What will the future bring?. Conflict Resolution Quarterly, 31(4), 357-386.

Luthans, F., & Doh, J. P. (2018) International management: Culture, strategy, and behavior (10th ed.) McGrawHill Education, New York, NY ISBN 13: 978-1259705076