International Business Strategy - Essay Example

This paper illustrates that Shell has not been successful in ensuring that its stakes are completely secured. The later developments in the project suggested that the Shell has not been able to maintain the same level of control in the project. The overall bargaining power of Shell continuously declined to owe to different factors despite the fact that it has been able to secure the relative favor from the government in the initial phase of the project. What is also important to understand that the negotiation process does not involve all the stakeholders in the project and resultant the take-off of the project fell victim of the pressure to the various stakeholders involved in the project?

One of the essential elements of the good negotiation process is to ensure that a win-win situation emerges for every player involved in the negotiation process. In these negotiations, both the parties to the negotiation were given the share in the project in such a manner that both the parties were better off at the end of a negotiation. Not only the Shell and the Gazprom would benefit from the deal but Russia as a State also because the success of the project would allow the smooth entry for the foreign firms in the country as well as the rapid expansion of the exploration facilities of the country.

Overall the negotiations only involved the limited number of stakeholders and therefore the project not only resulted in the cost overruns but also delayed the project. This was only the direct result of not involving all the stakeholders during the negotiation process. The overall shift in the bargaining power from Shell to the Russian government, therefore, was owing to the fact that all the stakeholders were not adequately involved in the process thus resulting into a shift towards the greater bargaining power for the Russian government.

This shift was also a result of the Russian policy of gaining direct control of the oil and gas exploration facilities while at the same time allowing foreign firms to actively involved in the exploration services while remaining under the direct control or supervision of State-owned organizations such as Gazprom.