Pacific Oil AffairConflict management and negotiationPaul Gaudin and Jean Fontaine negotiated a favorable contract for Pacific Oil Company in 1982 with Reliant Chemical Company. Gaudin and Fontaine prepared well for this negotiation, but they thought the negotiations would be quick and easy. Gaudin and Fontaine believed that even under current and future market conditions, a positive outcome could be achieved by providing the best possible service and maintaining an established positive relationship. However, their aspiration to obtain a favorable “renegotiated” contract was paralyzed by competition; expansion of the market for vinyl chloride monomer “VCM” and a different trading style from Reliant. The first problem with renegotiating this contract was the anticipated demand for the VCM, creating a "buyers' market", according to the manual, "demand was high, but supply was expected to increase exponentially" (Lewicki, Saunders and Barry 2010). Reliant already had a five-year contract with Pacific Oil, but competition would be tough when that contract expired. Knowledge of this market situation placed Reliant in a leveraged position and trapped Pacific Oil in a desperate sign-at-all-costs scenario. Gaudin and Fontaine assumed that even with price fluctuation; Reliant would sign a new one due to its established relationship with Pacific Oil. Gaudin and Fontaine's hypothesis opened up to more concessions by not attaching conditions to the price adjustment. They could have reacted by reducing the price of the formula subject to the duration of the contract. Another problem facing the Pacific Oil Company was its own internal research and development to expand the ...... middle of paper ...... would be in jeopardy because Reliant could essentially control the prices of the product. Then sell it to potential customers in the Pacific, eliminating any future sources of income. If Reliant insists that this is a deal breaker, then stopping or blocking negotiations may be the only recourse, as Pacific Oil must regain control of the negotiations. This might allow another competitor to come in and make its case, but Pacific Oil cannot afford more concessions or allow Reliant to take away potential customers or control the costs of its formula. ReferencesTRACY, B. (2013). The six negotiation styles. Mworld, 12(3), 21. Craver, C.B. (2003). Negotiation styles. Dispute Resolution Journal, 58(1), 48. Lewicki, R., Saunders, DM, Barry B., (2010) Negotiation: readings, exercises and cases. 6th ed. McGraw-Hill Irwin. New York, New York