Pacific Oil Company

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The response addresses the queries posted in 2119 words with references.

//Before start working on this, you can take an example of a Company. You are required to write on 'Third Party Conflict Resolution'. I am going to provide you some information on it which will help to complete it. //

Third Party Conflict Resolution

Abstract

This paper presents an elaborative knowledge of third party conflict resolution which is gaining importance now days, as most of the organizations are involved in international businesses which sometimes leads toward the way of conflict. The resolution of these emerging conflicts can be done effectively, with the help of third party intervention strategies. In this paper, a company background of Pacific Oil is given which is facing a situation of conflict with Reliant Corporation. Afterwards, this paper presents an illustrative description of third party intervention strategies like arbitration and mediator for resolving the conflict of the given case. This paper also depicts how effectively these intervention strategies can be used by Pacific Oil.

// I am taking Pacific Oil Company as an example. Below given is the information of this Company. //

Company Background

This paper discusses the problem of a famous "Pacific Oil Company". It is a kind of third party conflict resolution paper for Pacific Oil Company. Pacific Oil Company was established in 1902 as the Sweetwater Oil Company of Oklahoma City, Oklahoma. With the growth, the company originated widespread oil holdings in North Africa and the Middle East, as well as substantial coal beds in the western United States. One of Pacific's major industrial chemical lines was the production of vinyl chloride monomer (VCM).

In 1979, company established its first major contract of four years with the Reliant Corporation for the procurement of vinyl chloride monomer. The Reliant Corporation was a main industrial manufacturer of wood and petrochemical products for the construction industry. In February 1982, negotiations commenced to broaden the four-year contract. Jean Fontaine, who was the marketing vice president of Pacific Oil for Europe, started discussions with his VCM marketing manager, Paul Gaudin about the account of Reliant. They made some calculations about this extension and found that the net result was very favorable and both the parties signed another contract on October 24, 1982. The basic time of contract was from January 1983 to December 1987.

In the end of 1984, Fontaine and Gaudin reexamined all of their surviving chemical contracts. Even though everything had been continuing very swimmingly, but they discovered that the basic supply-demand situation on VCM was changing. The supply of VCM was anticipated to flourish rapidly over the next few years. A number of Pacific's competitors had declared their plans for the construction of VCM manufacturing facilities. Fontaine and Gaudin were worried as they knew that Reliant was likely aware of this situation. Consequently, they would probably use this opportunity to engage a more favorable price, with the potential threat that they would change their suppliers if the terms are not made favorable enough for them.

Fontaine was cognizant that in a position when the market turned from one of the high demand to excess supply, it was essential to make additional attempts to retain and re-sign all major current customers. As a result of their assessment of the situation in December 1984, Fontaine and Gaudin decided to continue on the following two fronts:

Company would approach Reliant with the intention of reopening negotiation on the current VCM contract with an interest toward broadening the contract five years from the point of agreement on contract terms. ...