Contract Creation and Management Simulation

1268 WordsSep 17, 20066 Pages
Contract Creation and Management Simulation William University of Cincinnati Legal Environment of Business Judge Jim P. Ponder July 2, 2000 Contract Creation and Management Simulation The simulation begins in the middle of a major dispute between a software-developing company, Span Systems, and one of its customers, Citizen-Schwartz AG (C-S), a large German bank. The two companies are in dispute over the quality and timeliness of deliverables. There have been major bugs found by C-S during testing and are worried about Span not fulfilling the one-year contract, which is worth $6 million. Span 's main concern is securing a larger contract with e-CRM, which is tangent on the outcome of the current contract. C-S has requested all…show more content…
To secure future contracts, this project needs to be put back on track so both companies can achieve mutual profitability. Achieve Goals Span must recognize its role in the negotiations process. It has a short- and long-term goal. The short-term goal is to achieve an amicable conclusion to the current contract. The long-term goal is securing future contracts. Control Customer Expectation The best way to achieve the long-term goal is to control customer expectation. Span could focus on the short-term goal and successfully negotiate the current contract by giving in on all concessions. But if it does that, over time there will be a drop in the perceived service quality and C-S ' high expectations will result in a widening service gap. Span needs to enforce some of the contract. If it doesn 't stand firm on a few of the important issues, C-S ' expectations and perceptions of service quality will be drastically inaccurate. The next contract will be very difficult to enforce. C-S will get the indication it can demand whatever it wants and Span will concede. Current Contract Span needs to carefully select which items it needs to negotiate fiercely and which ones it needs to concede. There must be balance; Span has to successfully renegotiate the current contract without the perception of being weak. Recommended Strategies Change Control Panel To preserve a healthy relationship, Span proposes to appoint a change control panel
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