Question

Geddy’s Dilemma

Mr.Geddy Teok， an American-Chinese (second generation) employee of a large New Jersey pharmaceutical firm， was based in Tokyo， Japan.His main aim was to get a major joint venture going with one of the largest Japanese pharmaceutical manufacturers.After four years of negotiating， the supreme moment had come for signing the contract.Obviously the lawyers from HQ in New Jersey were well prepared and sent the contract to Geddy one week before the “ceremony”.

After four years of Japanese experience， Geddy was shocked when he received the Document from the USA.He told us:“I could not even count the number of pages.There were just too many.But I remember the number of inches it measured when laying it on the table.I would guess that with every inch one of the Japanese would leave the room in despair.I hope they will come with a group of ten.Then at lease I will keep one person to talk to.The Japanese will sign the contract， but you should not take it too far.”

Geddy Teok decided to call HQ and ask for some help.The legal department said that the relationship was so complex that the contract needed to cover many possible instances.Moreover， a consultancy firm that advised them regularly said that Asians
in general and Japanese in particular had a reputation of being quite loose in defining what was developed by them and what came from the USA: “We better have some pain now and be clear in the terms of our relationship， than to run into problems laterbecauseofmiscommunication.Iftheysignitatleasttheyshowtheyareserious.”

Geddy was in despair， but he only had a day to decide what to do.The meeting was tomorrow.Should he perhaps call the Japanese CEO， with whom he had built quite a relationship? Or should he just go for it? Geddy framed his dilemma quite clearly to us: “Whatever I would do， it would hurt my career.If I insist on the Japanese partners signing the contract they will see it as proof of how little trust has been developed over the years of negotiation.This might mean a postponement of the discussions and in the worst case the end of the deal.If I reduce the contract to a couple of pages and present it as a ‘letter of intent’， HQ in general and even worse the whole legal department will jump on me， jeopardizing my career.”

1- What is the role of contract in US and Japanese business?

2- What is the possible solution to Geddy’s dilemma?

Answer 1

1.Role of contract by Mr.Geddys Japanaese Pharma industry is to start the Business with them by Joint Venture, as the culture varies from US and Japan, the US firm likes to enter the pahrma market by making Joint Venture with the Japanese company, so as to ease way of penetrating the market.

2. Possible Solution to Mr.Geddys Dilemma

a) He can speak with the CEO of the Japanese firm, who he had build the relation for four years regarding the contract documents which has been framed by his lawyer from US and to appologise for the same. He need to ensure that the new contract documents will be framed as per the Japanese law.

b) Just go for the contract

Explaining that the contract documenst framed by thei law is as per the US law and assuring that they will follow the law of Japan also.

c) Looking for alternative Solution to the Business

Can be discuss on outsourcing their business, where currently pharma industry in Japan is looking to overcome the complexity in the innovation and marketing of the same. Oustsourcing the new products of the firms by the US firms is one of the solution, where the Japanese firm can take as an option. This minimize the workforce burden and this can be utilised effectively while outsourcing.