MOD003497 - Stakeholder Negotiation at Kojo Furoa in the UK

This case study analyzes the challenges faced by Kojo Furoa, a Japanese multinational manufacturing organization with operations in the UK, focusing on issues such as increased competition, decaying infrastructure, high tax rates, costly labor, and declining revenue. The company is considering shifting its operations to another country to mitigate these risks. The report details a stakeholder meeting where representatives from various groups, including regional division managers, board members, labor unions, supplier consortiums, environmental activists, and local councilors, discuss the company's future. Key negotiation points include cutting production costs, finding new raw material vendors, improving customer relationship management, and potentially moving operations offshore. The case study also outlines negotiation theory and its stages, emphasizing the importance of preparation, discussion, clarifying goals, and achieving a win-win outcome. Ultimately, the suggestions from expert stakeholders provide a framework for Kojo Furoa to make informed decisions about its future direction.

Managing International
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Issues faced by Kojo furoa in recent times.............................................................................3
Advantages of Kojo furoa which provides competitive edge to the company ......................4
Current condition of company................................................................................................5
Negotiation agenda of Kojo furoa..........................................................................................5
Negotiation theory and its various stages...............................................................................6
Suggestions from expert stakeholders of company in meeting..............................................7
RECOMMENDATIONS.......................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...............................................................................................................10

INTRODUCTION
This report is based on the case study of Kojo Furoa. Kojo Furoa is a Japanese
multinational manufacturing organisation which operates a large number of operations and also
established a manufacturing plant in Cardown in North East England with headquarters in UK.
The organisation is having a great history in terms of there survival as well as generation of
good revenue from the industry. In the current situation, the firm has encounters several issues
and problems in UK marketplaces that create a huge influence on the productivity and
profitability of the organisation. To overcome from these issue, the firm is planning to shift their
operations and functions into another nations in the coming future so that they could minimize
the risk as well as for carrying the operation on the industry smoothly.
Issues faced by Kojo furoa in recent times
Competition in foreign- Many organisation are switching towards globalisation where
they try to penetrate into another nations that results in increased healthy rivalry. The elevated
competition in the industry reflects negatively on the income generation of the selected
organisation (Alzoubi and et. al, 2020). Recently, Kojo Furoa is facing major issues in UK as
there is increased number of competitors which directly impacts in the profitability of the firm.
The government of UK is constantly c0oncentrating on certain initiatives ad policies for
motivating foreign investment.
Decaying of the infrastructure- As the time passes by, the organisation ha been
encountered with several challenges regrading their infrastructure. There is requirement of
maintenance for its factories and plants and that would demand large investment. In order to
enhance the production of the selected organisation,they have to renovate their infrastructure.
Along with this, they also required to have modern technologies for high quality production as
their manufacturing plant is depleting as well as obsolete in England.
High tax rates- In current scenario, UK government has increased their direct taxes on
production of goods and services which has in return increase make Kojo Furoa weak in
financial terms in the industry (Doh, Tashman and Benischke, 2019). The monetary policies
which has been implied by UK government are also creating affects on the financial functioning
of Kojo Furoa.

Costly labour-As the standard of living has been elevated in UK, automatically the cost
of the labour also increased which has resulted in increasing production cost while workers are
also demanding for increasing its wages.
Negative business environment- Recently, the organisation is encountered many labour
protests and environmental issues. The external environment of Kojo furoa is not at the side for
smooth business operations. There is impact on the business due to the political factors in UK
(ElKheshin and Saleeb, 2020).
Declining revenue- As there is increase in the foreign investment in UK, the organisation
is encountering high decline in its profitability. The organisation is unable to put effort for their
revenue genration
Bankruptcy of major supplier- There are several supplier of the firm which went
bankrupt and they were considered as the major suppliers. This has developed a shortfall in raw
material availability from the industry. The organisation is used to gather raw materials in bulk
quantity from their main suppliers. It has become more expensive to manage raw material due to
bankruptcy of supplier.
Mismanagement- Recently, there were lot of mismanagement observed in Kojo furoa. In
is increase in the grievances from employees of the organisation. This has created a huge impact
on the operation and function of the organisation.
Advantages of Kojo furoa which provides competitive edge to the company
Number of employees- The number of employees that are working in selected
organisation is high as well as staff members are dedicated towards their work as well as skilled.
The organisation has good number of workers which have experience in their relevant area of
interest (Greco, 2020).
Local relations- One of the key factor that selected firm has, is their strong relationship
with local people which provide competitive edge over other organisations. Another strength of
Kojo furoa is that, they has support from local community. This is considered as the most
desirable workplace in UK. The firm also has good relations with government of the country
that assists to overcome from political issues.

Customer relationship management- The firm has separate customer relationship
management system that is comprises in capturing of the consumers as well as enhancing the
brand value (Greenwell and et. al, 2019).
Corporate Social Responsibility- The selected firm performs a good role in enhancing
the society as a whole. The firm has contributed towards 12% of its annual turnover to social
sectors such as NGOs, child development, education and so on. The organisation has performed
good in terms of doing social welfare in recently.
Current condition of company
As there is arising of many concerns in the workplace of the organisation, manager has
make decision for calling of a meeting of all the stakeholders of the organisation which could
make sure if the firm would shift their operation in other nation or not. This is has to be decided
priorly about what the organisation could do to overcome from the situation (Harikkala-
Laihinen, 2020). The main stakeholder members would give their best to offer the best solution
to the manager that would assists in transforming the business into positive manner.
The main stakeholder representatives which would be having an important part in
meeting of organisation are mentioned below:
 Regional Division Manager (Company Executive)
 Board Member (Shareholder Representative)
 Labour Union Representative
 Supplier Consortium Representative
 Environmental Activist Collective Representative
 Local Councillor (Local Government Representative)
Negotiation agenda of Kojo furoa
As mentioned above about the situation of the organisation, the profitability of Kojo
furoa is decreasing day by day and also with its sales and production that tare declining. The
organisation is also encountering with many barriers in UK marketplace that create influence on
its productivity and declining of the market value (Indriastuti, 2019). The current chief operating
officer has decided to cut production cost with a decision for shutting down their
manufacturing plant in UK. Also the Chief operating officer has taken decision to start
manufacturing off shore taking a new nation for business. In context to the selected organisation,
the firm has also appointed an independent professional mediator. As the organisation is facing

constant loses as well as requires to the risks and threats related with the operations of the
business, an immediate solution is required (Kasemsap, 2019). As the organisation is
concentrated on shifting their operations, it would need favourable responses from stakeholders
along with proper explanation. The firm has invited major stakeholders which are the
representatives of all member that related to business.
Negotiation theory and its various stages
Negotiation Theory- Negotiation theory is considered as practice which is done in effort
to solve a dispute that arises in the company owing to any conflict . Under negotiation theory a
final agreement is ready after making a proper conclusion from the discussion. People find the
best possible result drawn from discussing major issues and concerns of the firm in the meeting.
Negotiation theory includes following stages:
Preparation- Preparation is the first stage in negotiation where timings and location of a
negotiation meeting are decided. Commonly, an organisation takes decision in meeting hall as
well as they could choose an outside location for conducting negotiation. This is performed by
organisers of a meeting in effort for creating a good environment and conditions for the meeting.
Preparation comprises of setting up an environment that is appropriate for a negotiation meeting
(Khan and Wisner, 2019).
Discussion- A discussion stage takes place at secondary stage that involves the
comprehending of present issues which would be related to the situation. Stakeholders evaluates
the present situation properly in effort to analyse the favourable solutions for the present issues
and concerns. A depth discussion is required for formulating a healthy negotiation.
Clarifying goals- This is significant to knowledge all the desires of each person that is
present in the meeting. This is vital for knowing the aim of each and every person in the firm in
effort to do a proper negotiation. In a company, this is essential to know the personal goals as it
plays a vital role in formulating the of strategies for the company.
Negotiate towards a win-win outcome- This is objective of negotiation to give a win-
win result that identifies that each and every individual present in the meeting must feel positive
that they also have a contribution in organisational gain (Korepanov and et. Al, 2020).
Agreement- Agreement must be prepared at final stage in a negotiation. After giving
proper conclusion from the meeting, all the recommendations that are given by experts in
meeting must be considered as an agreement.

Suggestions from expert stakeholders of company in meeting
The main topic of discussion in meeting is whether to shift operations of company to off
shore or not. A detailed analysis and discussion has went for hours with results of observations
by distinct experts which are mentioned below:
Regional division manager has recommend to cut off production cost and also to find
out new raw material vendors for Kojo furoa. Regional divisional manager has also asked for
performance appraisal of all the staff members. Along with this, the manager has also suggested
to introduce a new customer relationship management system that would capture buyers from
the industry (Mohr and Batsakis, 2019).
Shareholder Representative has suggested to shift functions and operations of the
organisation off shore as the company is encountering big loses in its investment. The
shareholder representatives demand its shares to grow in market as other organisations as they
are re also not getting any premium on shares invested by them. This is encapsulated by
representatives that, when in future, firm would not lead their business then this wil be
extremely hard to survive in industry.
Labour union representative has suggested that he wanted to have the fulfilment of all
the need as well as demands that are raised by workers of the Kojo Furoa during their protests.
The demands relevant to their increased wages must be be fulfilled so that they could work
happily. This is recommended that constant strikes in the organisation could lead to business risk
and also would lead to production outcome.
Supplier consortium representative agrees to the point of migrating operations to off
shore as the main vendor of Kojo furoa have been bankrupt. Along with this, there is lack of
vendors which offers raw material at cheap prices to the organisation. Supplier are considered as
the backbone of production divisions, so it is mandatory to keep vendors ready 24*7 for the firm
(Tsai, 2021).
Environmental activist collective representative suggests that there are various
external environmental factors such as declining revenue, labour protests and huge external
threat from external environment in marketplace is increasing daily. For this,m the organisation
might sees opportunity for establishing their plants at a good location in another nation.
Environmental activist has recommended that in coming years, the firm could implement
policies that would be beneficial to the environment of the business.

Local counsellor has advised firm to leave present market owing to elevated tax rates in
UK. Counsellor has also suggested that political factors of UK might also create influence on
business in future.
Many representatives in meeting has suggested to adopt business models and to implement them
soon with favourable conditions
Business to customer- This is a business model in which an organisation directly sells its
goods to the consumers. Business to customer model is commonly utilised in e-commerce
industry where an online platform sells its commodities to consumers directly. This is utilised in
today's time as customers are attracted towards online shopping. Kojo furoa might utilise online
channel for selling its manufactured goods to consumers directly which would assists them to
gain market growth at new marketplace (Zakirova and et. Al, 2020).
Business to business- This is a business model where business directly sells its products
and services in some another business. Kojo Furoa could utilise this business model in effort to
gain competitive edge as firm might purchase raw materials from other firm and continuous their
operations.
Customer to business- In this business model consumer directly sell products and
services to a business. Transactions included in the customer to business model are short and also
have less value. Kojo Furoa could adopt this business model in a long run and could buy goods
from their consumers directly.
RECOMMENDATIONS
Kojo furoa is presently in that situation where they are facing huge loses in the industry.
The organisation has encountered with many issues that are giving burden in such a way that
they are at a condition of shutting down of its firm in UK and as a consequence, the firm wanted
to operate their business off shore. After negotiation meeting and a detailed analysis of the case,
it could be recommended for company to adopt suitable business model for conducting their
business. The firm must adhere to the agreement that is generated from the negotiation meeting
(Zin and Ibrahim, 2020). This is recommended for the organisation to chose a new location for
establishing their manufacturing plant where there is a good availability of assets so that it could
conduct its manufacturing successfully. Kojo furoa must also do a detailed analyse tax policies
of distinct nations in effort to maximise its revenue.

CONCLUSION
From the above analysis, it can be concluded that Kojo furoa has to select a nation that
offers best opportunity for new multinational companies start-up. The organisation has to find for
a nation that has favourable political and economical conditions in order to gain a rapid growth
in short span of time. For achieving a desired goals in future, this has to concentrate on time so
that there must not be any delay in conducting further operations .
REFERENCES
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Doh, J.P., Tashman, P. and Benischke, M.H., 2019. Adapting to grand environmental challenges
through collective entrepreneurship. Academy of Management Perspectives. 33(4).
pp.450-468.

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Greenwell, T.C. and et. al, 2019. Managing sport events. Human Kinetics.
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Mohr, A. and Batsakis, G., 2019. The contingent effect of TMT international experience on
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