Instituto Tecnológico y de Estudios Superiores de Monterrey

Roberto Hernández A00739149

Dr. Eileen Daspro
Negotiation Tactics
October 24, 2014

Case Analysis: The Shakedown

Definition and Significance of the problem.
In this case they tell us a story of company that is founded by a an Ukrainian (Pavlo Zhuk)
that was raised in the United States, because his parents fled Ukraine to US after World War II
ended. He then became an engineer and also made an MBA which did not finish because he
decided to start his own business Customer Strategy Solutions, that developed software for order
fulfillment systems. Later on he decides to invite a friend who share his origin, Hnatyuk, but was
raised in the UK . The problem in the situation is when after they resolve to bring the business
operations to Ukraine, because Zhuk encounter with a culture that he did not understand
thoroughly, only by the stories of his relatives. He saw that corruption was a major issue, and that
in order to get things done fast he would have to “go along to get along” with the authorities.This
culture of bribery to which he had no familiarity started to make him feel that this perhaps was
not the best idea. So the dilemma that Zhuk has encounter is what to do with this situation is he
going to leave to somewhere else, or better return to the US.

Analysis of the alternatives.

The alternatives that and their respective analysis are presented in the next part:
• Do not continue with the establishment of the business in Ukraine, this will cost you the
expenses you have already made, and this also would be an alternative that Zhuk will may be
looking to it as a last resort (because of his dreams being wanting to help that country).
• Continue whit the establishment but do not enter in the culture of bribery that has been
imposed to Zhuk in order to expedite the procedures to open a business. This action will
automatically cost you more money than bribing, because the opportunity cost of starting

CASE ANALYSIS !1
 business one year from now has significant impact on the contracts that the company would
have made.
• Accept the culture of bribery, this will bring a little cost at the beginning, but the business will
be running in a week. The other side to this that is not so good is the image that is going to
leave in Ukraine, that the company is weak and is easy to get money from it. And also the
impact with your clients or potential clients, what if they realize that your company is envolved
with these type of acts.

Justification of alternative chosen.

We think that it is not right to maintain a reputation that it is not ethical and that bribery should
not be in any company manual or norm. It is important to mention that the company should be
aware that when its established on a country that has a different culture is important to accept
some of the norms and values that the host culture as long as it does not interfere with the
standards that the company has previously established.

Action plan.
Steps of the plan of choosing another country to establish operations:
• The first step that we want to do is to back up as politely from the situation, accept the expenses
that you have made.
• The second step would be to create a policy that you agree to be fair and ethical.
• Third step choose a country for establish the company, look for different alternatives and decide
was best for your vision.

CASE ANALYSIS !2