Case Detail

Case Summary

Negotiating for Fertilizer

Case Number: 5-409-753, Year Published: 2009, Revision Date: November 01, 2009

HBS Number: KEL434

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Authors: Jeanne Brett; Katherine Nelson; Nicole Tilzer

Key Concepts

Negotiation Strategy, Culture, Not for Profit, Kenya, Developing Economy, Negotiation Planning, BATNA, Negotiating Globally

Abstract

One Acre Fund (OAF) was founded by Andrew Youn in 2005 for the purpose of helping to solve the chronic hunger problem in Africa. The idea is to provide the resources (seed, fertilizer, and education) necessary for African farm families to feed themselves when their land holdings are one acre or less. The business model of OAF is that of a cooperative: OAF buys resources like seeds and fertilizer in bulk at reduced prices and distributes them to small farmers who otherwise could not afford them. This case concerns the negotiation that OAF’s manager of external relations and research, Moises Postigo, conducted to buy fertilizer in the last quarter of 2007. The case provides an opportunity for students to analyze a real-world deal-making negotiation in a developing economy. A number of aspects of the context of the negotiation and the negotiation process itself make for good class discussion. Postigo did a good job preparing for the negotiation, making the case one that emphasizes proper use of negotiation planning and sensitive understanding of the negotiation environment.

Some of the elements that make for good discussion include the following: OAF was a new organization, unknown to the five major providers of fertilizer in Kenya. The negotiations were entirely conducted by cell phone. Negotiations went through stages of request for a bid, discussion with multiple bidders, selection of a provider, and negotiation. There were multiple issues, including price delivery and form of payment. Postigo was negotiating in the shadow of the possibility that the Kenyan government would start selling subsidized fertilizer to small farmers.

Learning Objectives

  • Analyze the fundamentals of a real-world negotiation
  • Consider cultural implications for negotiation strategy
  • Consider negotiation strategy decisions particular to the context: commodity purchase, developing country, etc.
  • Understand how the economic and political context affects negotiations
  • Understand the importance of relationships in negotiations
  • Number of Pages: 17

    Extended Case Information

    Teaching Areas: Management, Non Profit, Organizational Behavior

    Teaching Note Available: Yes

    Geographic: Bungoma, Kenya, Africa

    Industry: Nonprofit, Farming

    Organization Name: One Acre Fund

    Organization Department: External Relations and Research

    Organization Size: Small

    Decision Maker Position: Manager

    Decision Maker Gender: Male

    Year of Case: 2007