As the new owner of the Aroha Resort Limited, Nathan is being challenged from various business and interpretational relationships in multiple perspectives. Legally, he is expected to understand the legal boundaries under internal and external business circumstances; socially, his is challenged by diversified people related to the business with distinctive cultural background and mentalities; managerially, as a new business owner, his leadership and management style is also being tested to ensure the business can sustain its growth under his management. This essay will review Nathan and Frank's business relationship from legal, social and management perspectives.
The legal issue that Nathan is facing with Frank is that is Frank legally obliged to provide the agreed beverages with the 10% discounted price. As the long term beer supplier of Aroha Resort, they have been having regular legal bonded business transactions. During the communication between Nathan and Frank, Nathan initiated the invitation of offer by faxing a list of beverage products that they need to purchase and Frank offered a 5% discount via email, however, Nathan modified the term by changing the price to 10% discount and Frank accepted this counter offer by email. According to the contract law, despite no formal contract has been written and signed, a business deal with clear offer and acceptance should still be considered as a legally bonded contract. Nathan could clearly use the email record as the proof of this contract to demonstrate the validity of the offer and acceptance. Consideration is another important element of a valid contract. In this case, the counter offer Nathan made is to the benefit of his business cost while Frank clearly stated that he accepted the negotiated price because he is seeking to continue this healthy business relationship for his long term business stability. Hence, there is definitely consideration element involved in the formation of this contract. Nathan is entitled to take on Frank on court with the fair trading act section 9 specifying that the supplier is using misleading pricing strategy to sell products not according to the agreed price, and obtain compensation on this matter. On the flip side, Frank could argue that the 10% discount is based on his original retail price instead of the prices on the catalogue, this point is not clearly stated in any of their emails, therefore, he might have a change to get away from the compensation should there is a lawsuit.
From social science perspective, lawsuit is not the most intelligent option for Nathan to deal with the business relationship with Frank. In order to make sure the business to survive and excel what the previous owners have achieved, Nathan need to perform better in the detailed elements of the business. Secure lower cost in beverage supply is one of these elements to directly increase the profit margin and boost up the financial strength of the Aroha Resort, to do that he needs to develop the business relationship with the suppliers to the next level. Nathan started his first round negotiation with Frank using non direct communication channels such as fax and email. Compared to face to face communication, massive amount of non verbal elements of the message involved in the communication are filed to convey due to the nature of these communication channels. Changes are that Nathan was using the business fax machine and the email address that the previous owners were using for the business, Frank may not even aware that Nathan is now the new owner of the resort. would argue that this is not the effective way to conduct effective negotiation, with face to face negotiation, especially at the very first round of the negotiation process, Nathan could make a better impression to Frank on his willingness of developing better relationship with the supplier, which could result in higher chance for Frank to offer better deals for him and avoid misunderstandings on the pricing of the products.
In terms of management, Nathan needs to pull the employees together and work as a dedicated team to achieve a common goal which is to ensure the continuous growth of the business. Nathan has been taken some questionable approach in the early days of his management career in Aroha Resort, he did not seems to be effective in terms of inter cultural communication as he failed to convince the former chef Paulo to make some addition to the menu. After the departure of Paulo, Nathan has delegated some power to Rico to manage the casual staff however Hoani who is also the key contact to the beverage supply management role is having issue with Rico's approach. Hoani confirmed that he has not had any issues in dealing with Frank beer in the past, and Nathan apparently ignored the value of Hoani's experiences in dealing with Frank as he deliberately choose the day when Hoani is away to negotiate the price with Frank. As it is proven in Rico, is Nathan promise some future empowerment to employees like what he did to Rico, the employee's motivation will be much higher and will work hard to pursue their career goals as an incentive. Because Nathan does not have high level experiences and expertise in supply chain management, he could delegate Hoani in this area and develop his career towards that direction and that could potentially motivate him to stimulate some better solutions in supplier relationship development and source beverage products and distribution with much lower costs.
In conclusion, Nathan need to review his approaches taken to date in the decisions made as the owner of the Aroha Resort. Focusing on the relationship with Frank Beer, contractually Frank seems to be broken the deal made via email that 10% discount should be given as discussed. However, the negotiation approach Nathan has used do have a great room for improvement as face to face negotiation could be a better approach to take and also the best option for Nathan to choose over court order in dealing with the misunderstandings of the beverage prices. Finally, Nathan should fully utilize the benefits of empowerment to fully expose Hoani's experiences in dealing with Frank and find appropriate ways to motivate him to contribute more to the business.