Provide a very clear and straight forward future

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Reference no: EM133617119

ANALYSIS OF A SUCCESSFUL DISTRIBUTIVE NEGOTIATION STRATEGY.

This is the case between ABC Company Ltd and FCMB Lagos. ABC Company Ltd had a business relationship with FCMB ''THE Bank'' and the bank advanced a revolving overdraft of five hundred million naira to ABC Company Ltd. As a result of some economic reasons, ABC Company Ltd couldn't return the money in good time because of its business failure. The bank, on the other hand, accumulated interest at a punitive rate for a very long time.

After a few years, the bank wrote a letter to ABC Company Ltd threatening to petition the EFCC -Economic and Financial Crime Commission about the bad loan and to sell the ABC Company Ltd collateral. ABC Company Ltd requested a negotiation to resolve the matter.

A meeting was scheduled with the bank's loan and remedial services department. At the meeting, the bank insisted that ABC Company Ltd pay up the loan with all the accrued interest to date or forfeit its collateral. The bank chose to omit the law. ABC Company made an offer to renegotiate the interest rate and to pay the amount less accrued interest on the bad load but this was turned down by the bank which insisted on full payment.

After a series of negotiations, ABC Company, equipped with the relevant laws and policies that govern loans and advances in the country as its BATNA forced the bank to accept its terms. The CBN Prudential Guidelines are guides put in place by the Central Bank of Nigeria to ensure that banks do not capitalize on bad loans and continue to earn interest on them when they are actually bad loans. The CBN puts a limit to the time a bank should carry bad loans and must make full provisions for the accrued interest and stop it from accumulating further debt interest.

The bank representative who omitted the law in the negotiation could not do otherwise when it was presented with the law and proposed payment of an amount equal to what the guideline stipulated, and not the bogus amount the bank was carrying in their books. The strategy of ABC Company Ltd arming itself with the relevant laws and policies made the bank get a reduced payment figure for ABC Company Ltd.

Question 1: Provide critical thing Problem statement in terms of negotiation to this Story

Question 2: Provide a very clear and straight forward future recommendation to this story in terms of negotiation

Reference no: EM133617119

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