Samsung, a South Korean technology company, is one of the most prominent technology companies in the world. The company is best known for its development of smartphones, which makes it a formidable rival to Apple Inc. It is this rivalry that drove Samsung into a major dispute with Apple, resulting into numerous lawsuits. Apple filed a lawsuit in 2011 accusing Samsung of copying the ‘look’ or design of the iPhone when it invented the Galaxy line of phones. In return, Samsung sued Apple for not paying royalties for using its wireless transmission technology (Staff, 2019). From that time, the number of disputes between the two companies has increased steadily, especially those involving patents. The two companies showed willingness to compromise, and consequently, they cut the number of disputed patents in half. However, before the CEOs of the two companies sat down at the negotiation table, Apple filed a motion requesting the presiding judge to stop the sale of Samsung’s Galaxy Tab 10.1 arguing that the device was designed to replicate Apple’s second-generation iPad.
Both sides hoped to end the battle outside the court, as most judges had suggested. Samsung was one of Apple’s biggest suppliers, and evidently, there were enough incentives to solve the dispute amicably. However, the negotiation firstly ended in an impasse in 2012 because both sides refused to back down on their terms. In 2018, a solution between the two companies was reached outside the court. Previously, the courts had determined that Samsung had copied Apple’s mobile phone and tablet functions and features, and therefore, needed to compensate Apple for the breach of the patent law as well as the legal fees Apple had used.
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Two prominent negotiator-cognition issues emerged in the dispute; self-serving bias and overestimation of own value (Bazerman, & Moore, 2013). Samsung consciously knew that it had violated the patent law and to a significant degree, copied iPhone’s features in its line of smartphones. Samsung thought it had a chance to win the case and be allowed to use the features (self-serving bias) in the Galaxy line of products. Secondly, Samsung overestimated its value by suing Apple for failure to pay royalties for using Samsung’s wireless technology. By doing so, Samsung hoped Apple would stop the patent case. That means Samsung did not deny copying Apple’s innovations because it opted to file a case that was very different from the dispute.
Some of the decision analysis tools are; root cause analysis, issue analysis, and stakeholder analysis. Root cause analysis looks at the origin of the problem to understand its origin. Context analysis evaluates the context of the issue to establish its consequences to the company at the present moment (Gregory, McDaniels, & Fields, 2001). Stakeholder analysis identifies how parties such as investors and customers may be affected by the conflict. Samsung must have used stakeholder analysis to end the dispute. It was somehow evident that some of the Galaxy mobile phone features had been copied from the iPhone and if the company failed to get a solution, its image would be tainted. Customers might have boycotted its products and investors would have withdrawn.
BATNA in full is “Best alternative to a negotiated agreement”. It is the most advantageous alternative parties in a conflict can take if negotiations fail. In Samsung and Apple case, negotiations failed, and the parties decided to solve the dispute out of court. Samsung’s best alternative was to pay Apple a sum of money, and Apple’s best option was to accept the payment. Nevertheless, Samsung should have ceded some ground in the beginning and solved the case outside the court to avoid huge financial penalties, which had accumulated over the years.
References
Bazerman, M., & Moore, D. A. (2013). Judgment in managerial decision making.
Gregory, R., McDaniels, T., & Fields, D. (2001). Decision aiding, not dispute resolution: Creating insights through structured environmental decisions. Journal of Policy Analysis and Management: The Journal of the Association for Public Policy Analysis and Management , 20 (3), 415-432.
Staff, P. (2019). Example of Negotiation in Business: Apple and Samsung’s Dispute Resolution Case Study. Harvard Law School . https://www.pon.harvard.edu/daily/business-negotiations/apple-v-samsung-an-example-of-negotiation-in-business-gone-bad/
