Blog 5 Fall 2019

Posted on by gab215

Case part 1:

1: Facts of situation:

  • The 14 million trees in India have been used extensively over the past 2,000 years for medicinal purposes, food production, toiletries, fuel, and pesticides
  • Azadirachta indica (Neem) a tree indigenous to India
  • Neem is sacred
  • Neem is used for medical purposes, food production, toiletries, fuel, and pesticides
  • India employes about 100k people and used in pesticide industry
  • Pesticides are used widely across India
  • Chetan lives in Agra, India and operates a small business of neem tree products
  • including pesticides, skin creams, contraceptives, lamp oil and many other products
  • Family owned biz Chetan has HS education
  • Chetan employs 60 people
  • Does quality control reference 
  • Chetan does not know the exact name of the neem seed extract, Azadirachtin
  • Has cultural knowledge but not a lot of knowledge in the science end
  • Tom Johnson is developing neem seed pesticides (affiliated with OOPS)
  • Johnson’s co invested 5mil to conduct safety and performance tests over last decade
  • Tom’s company has certification (patent) through the EPA to sell pesticides (worldwide patent)
  • Tom has made profit of 12.5 million during his first year
  • OOPS wants to set up biz in India
  • Economy of scale at play bc OOPS selling all over world and will likely put Chetan out of business
  • OOPS is demanding a royalty from Chetan’s business and other small industries that make neem-based insecticides

 

What rights does Chetan have and is it ethical for the US company to uphold their patent rights? 

 

Define problem and stakeholders Motivations

  • Chetan
    • Professional
    • Chetan wants to maintain his business without the royalties charged by OOPS ruining his venture
    • Wants to see his families generation long venture continue
    • Personal
    • Can be assumed that Chetan would struggle supporting his family members if his co. collapses bc royalties
  • OOPS
    • Prof: They want the business to work in India. 
    • Personal: they want to provide effective organic solutions to pesticides so people do not get sick and that they can protect the patent 
  • Tom Johnson
    • Prof: Tom wants money and he wants his business to be successful. He wants to tap into the market in India 
    • Personal: He might want to give back.. I.e. help indians
  • Chetan’s Family
    • Prof: not really
    • Personal: Wants to see the business grow. Distrust for westerners. They know the market very well. They hold the plant sacred and might be sus of the westerners. 
  • Chetan’s employees (60+)
    • Personal: Want to keep their jobs to provide for their families. Same distrust of western influence as Chetan’s family. 
    • Professional: Want a stable job that gives them income. Love u @ maria THX
  • OOPS investors
    • Personal: n/a
    • Professional: Want the company to be as successful and profitable as possible. Also want the company to act ethically so that there are no scandals. 
  • Other small Indian ventures that will have to pay royalties
    • These ventures will be charged royalty by OOPS on products that are tied to their patent. This would negatively impact their ventured greatly and may put them out of business
  • Indian People
    • Personal: want the product to stay the same price or go down 

 

Alternate Solutions (4)

  1. Legal way (Patent binding)
    1. Because Tom obtained the patent so Chetan has no option to pay the royalty
      1. Pros: Tom gets mad money and he is successful 
      2. Cons: Tom puts people out of business and he is disliked by many people 
  2. Something in between: Tom Johnson and OOPS understand that entering the Indian market and collecting royalties from Chetan’s business will put Chetan out of business. To compromise, OOPS hires Chetan and his employees for a standard working wage. 

OR OOPS buys Chetan’s company

    1. Pros: Chetan and his employees already know how to make neem based products. Chetan and his employees retain a job. 
    2. Cons: Wages under OOPS might not be the same as the wages Chetan and his employees were making independently. 

 

Case Part 2: 

 

Step 1: Determine the facts in the situation – obtain all of the unbiased facts possible

  • OOPS launched 6 months ago, crushing market
  • 20 different products
  • neem based soap – most successful 
  • OOPS wrapper features a photo of Tom Johnson
  • Chetans wrapper features a photo of the founders great grandfather
  • Chetan has tried to confince Tom to leave the market or collab
  • Tom will not leave market 
  • Tom is open to collaboration if it will make him money
  • Chetans business if suffering will have to lay of half his staff
  • Employees and families have worked with him for centuries
  • Chetan will not suffer as much from declining business because of his investments
  • Chetan s employees know he met with Tom 
  • Believe chetan has cut a deal with Tom/OOPS
  • Employees feel cheated and abandon 
  • Some employees have resigned to their fate
  • Some are confident Chetan will find a way out 
  • Some want to physically want to beat Chetan up 

 

Step 2: Define the problem and the stakeholders – those with a vested interest in the outcome

  • Problem: Tom is dominating the neem product industry and small business owners like Chetan and his employees are in danger of going bankrupt and want tom to leave the market or collaborate. 
  • Stakeholders 
    • OOPS 
    • Tom
    • Chetan
    • Chetan’s family
    • Chetan’s employees 
    • Employees’ family
    • Neem customers
    • Other small neem product businesses
    • Neem growers/gardeners

 

Step 3: Determine and distinguish between the personal and professional motivations of the

Stakeholders.

  1. OOPS
    1. Personal/professional: want to keep business growing and keep control over the market 
  2. Tom
    1. Personal: wants to be the top dog
    2. Professional: want OOPS to grow bigger and make more money. Provide neem products for indians. 
  3. Chetan
    1. Personal: family legacy is on the stake. Employees are friends and he doesn’t want to seem like a bad friend by betraying them. 
    2. Professional: don’t want to go out of business and don’t want to lay off their long term loyal employees
  4. Chetan’s family
    1. Personal: family legacy. They’d feel sad if they have to fire employees who are also their friends. Also don’t want to feel financially unstable when invested money later decreases too low. 
  5. Chetan’s employees
    1. Personal: they’re long term employees and so are their relatives so it’s a personal business to them. 
    2. Professional: they need the money to make a living so they can’t be fired. 
  6. Employees’ family
    1. personal/professional: they need their breadwinners to make money to provide at home otherwise they could starve and die. 
  7. Neem customers
    1. Personal: Desire to get neem products at the cheapest price
  8. Other small neem product businesses
    1. Professional: Continue making money/grow profits
    2. Personal: Keep their employees’ jobs
  9. Neem growers/gardeners 
    1. persona/Professional: want to make money selling neem 

 

Step 4: Formulate (at least three) alternative solutions – based on information available, to have a win-win situation for your relationship and your venture. Approaches [1/2/3: repeat for every action]

  • Solution 1: Chetan leaves his business and negotiates with Tom to find jobs for his employees at OOPS
  • • How does it solve the problem?
    • o Pros: Chetan’s employees have jobs 
    • o Cons
  • • How does it save face of those involved?
  • • Implications on relationships
    • o Short-term
    • o Long-term
  • • Implications on the venture
    • o Short-term
    • o Long-term

 

  • Solution 2:Cut a deal with Tom to use Chetans’ business’ image and brand name to further penetrate the Indian market, Chetan receives compensation from this deal (for using his brand) and his employees receive jobs.
  • • How does it solve the problem?
    • o Pros: Chetan gets to continue employing his workers, and his family’s legacy will continue on 
    • o Cons: Will likely have to surrender business capital and/or oversight. Chetan won’t have much of a say in how the business is run. 
  • • How does it save face of those involved?
    • Chetan will be able to continue employing the same families and continue to generate a profit. Tom will grow his business and profit margin.
  • • Implications on relationships
    • o Short-term: Chetan will maintain his relationship with his employees and generate a relationship with Tom and OOPS
    • o Long-term: Chetan’s relationship with his employees may remain strong, but as his business and Tom’s continue to dominate the market, there could be increased tensions with other Indian Neem businesses and their employees
  • • Implications on the venture
    • o Short-term: No layoffs will occur, management will likely change
    • o Long-term: the employees’ jobs will be safe, the overall business structure will be permanently altered, they will edge out other small Neem businesses

 

  • Solution 3: Chetan and Tom do nothing. Chetan will help his employees find jobs (letters of rec). 
  • • How does it solve the problem? 
    • Pros: It eliminates the tension between Tom and Cheetan. Chetan’s employees can find new jobs and provide for their families. At least some of employees will remain employed 
    • Cons: Chetan’s legacy dies

Step 6: Best Solution: Form a collaboration where Tom is in charge in production and Chetan is the supplier

This solution is the best case scenario for Chetan because his family’s business can continue to grow and his employees will be kept happy with new opportunities and more work on their hands. He will also be able to take advantage of OOPS resources and have economies of scale because of their increased share of the market. Chetan will be able to keep his connections with the local communities. He will save face with his employees by staying loyal to them and save face with OOPS because of the opportunities that come to both companies through the collaboration. By losing control of the production of the products, they may lose some of the authenticity or qualities of Chetan’s products, but Tom and Chetan could potentially renegotiate recipes to ensure that they are still organic but more similar to Chetan’s products.

Implementation:
Strike a deal with Tom/OOPS that delegates which responsibilities each side of the company is responsible for, which recipes will be used, and the profit split
Figure out if any employees will need to change roles in the company
OOPS uses their resources to produce neem products at a lower cost
Chetan and his employees distribute the products to leverage their local connections

 

No comments yet

Leave a Reply