EGADE Business School

EGADE20 – Negotiations

Case Analysis:
La Ceiba: Navigating Microfinance
and Relationships in Honduras

Carlos Alberto Moreno Tamez

07/28/2019
Table of Contents
Executive Summary ........................................................................................................................................................ 2

Case Analysis Framework ........................................................................................................................................ 2

Negotiation #1: Nelly .................................................................................................................................................... 3

Negotiation #2: Emy ...................................................................................................................................................... 4

Negotiation #3: Kevin .................................................................................................................................................... 5

Negotiation #4: Jessica ................................................................................................................................................. 6

Conclusions ....................................................................................................................................................................... 7

Page | 1
 Case Analysis: La Ceiba

Executive Summary
Case Analysis Framework
In order to better approach the different cases that the “La Ceiba” paper summarize I used two
methodologies, the first one was “The Case Method” in order to have a broader understanding of
the entire case by following the steps that the method suggest that are:

1. Review any questions/focus areas in the syllabus

2. Briefly skim the case and appendices
3. Read the case thoroughly
4. Make notes as you write
5. Prepare an “elevator speech” summary
6. Determine appropriate analyses
7. Determine relevant, irrelevant, and missing information
8. Conduct analyses
9. Develop alternatives
10. Develop recommendations
11. Engage your study group (pending for the class discussion)

Once I had the full overview of the case, I approached every single case immersed within it with a
second methodology that is “the seven elements framework”. Members of the Harvard
Negotiation Project developed a framework to help people prepare more effectively for
negotiation. The Seven Elements framework describes the essential tools needed to identify the
goals, prepare effectively to minimize surprises, and take advantage of opportunities as they arise
in negotiation.

Following you will find the development of the 4 cases that the paper presents:

Page | 2
Negotiation #1: Nelly
Elements of Negotiation:

1. Interests
Nelly is the owner of a small convenience store, so she relied critically on loans to ensure that she
has enough inventory to run her business. She was very concerned about the delayed payments of
her loan

2. Legitimacy
She was being honest about her concerns regarding the delayed payments that was the main
reason she wanted to negotiate the new terms in order to have a new future loan

3. Relations
There was no relation between Nelly and Scott

4. Alternatives
The alternative that Nelly had was to accept the regular loan conditions which stablish that when
there is a payment delay you will only have access to a lower amount loan

5. Options
Scott offered her to pay off her loan within a period of 20 days and she paid it in 18 days but Scott
made a miscalculation considering that she was 40 days late instead of 47 actually. Then the option
that she could have is to have a new loan for the same initial amount considering the mistake that
Scott made.

6. Commitments
Nelly paid the loan in accordance to the 20 days that Scott gave to her.

7. Communication
There was a failure in the communication from Scott due to his miscalculation regarding the delayed
time

Case Question:
Should Scott still offer Nelly the larger loan of 4,000 lempiras? If not, what should Scott offer, if anything,
instead?

Answer:
Yes, in my opinion Scott should give Nelly the opportunity to have the larger loan of 4,000 because
there were no bad intentions from Nelly and she complied with the agreement that she made with
Scott within the time that he established in the negotiation

Page | 3
Negotiation #2: Emy
Elements of Negotiation:

1. Interests
Emy interest was to have a loan in order to continue a tortilla-selling business that she had run
together with Julissa

2. Legitimacy
With the elements that the case shows I’m not sure about the legitimacy of the request from Emy.
Carlos thinks that Emy is not likely to stay within the city for a long period of time. Julissa and her
husband have a long record of dishonest actions and in some way Emy is part of the same family
and lives with them

3. Relations
There is no direct relation between Emy and Scott neither Carlos but Julissa was one of the original
13 clients to ever receive a loan from “La Ceiba” and that resulted in default.

4. Alternatives
If Scott reject Emy´s loans request, Emy still has the alternative to ask for the same loan to another
company

5. Options
The option could be to give Emy the first-time loan of $500 lempiras maybe with a short-term
period to repay for it and in case she complies start to extend the amount and time of the future
loans

6. Commitments
It seems that there will be no commitment from Emy to repay for the loan

7. Communication
Emy didn't properly introduced herself to Carlos neither Scott. She approached Scott along the
road into Villa Soleada and that didn't help to establish a trust relationship between them.

Case Question:
Should Scott offer Emy, as a first-time loan client, a loan of 500 lempiras? If not, what should Scott
offer, if anything, instead?

Answer:

Page | 4
If I were Scott I wouldn't offer Emy the first-time loan neither another option due to the history
related to Emy´s family.

Negotiation #3: Kevin

Elements of Negotiation:

1. Interests
Scott is interested in giving Kevin a compensation for the extra time he will spend driving Carlos
back home. On the other hand, Kevin had a situation with his aunt that clearly pushed him to need
1,000 lempiras

2. Legitimacy
There are no bad intentions from Kevin neither from Carlos nor Scott

3. Relations
Kevin is the chief driver of “Students Helping Honduras”, that means that he has a good relationship
with the company

4. Alternatives
 Ask for money to friends or family
 Find another job
 Drive extra time in order to get more money

5. Options
To jump Kevin directly to the $800 lempiras loan instead of going to the second stage of $650
To give Kevin $1,000 lempiras without taking into account the rules established within the company

6. Commitments
Considering that Kevin is a SHH employee and his attitude towards helping Carlos looks like he will
be committed to repay the loan

7. Communication

There is a good communication among Kevin, Scott and the company

Case Question:
Should Scott affirm that his initial loan offer of a fast-forwarded loan amount of 1,000 lempiras
for Kevin is still on the table? If not, what should Scott offer, if anything, instead?

Page | 5
Answer:

Yes, considering all the variables that the case explain I believe that Kevin is a good candidate to
have (as an exception) the fast-forwarded loan of 1,000 lempiras in order to compensate him for
his willingness to help Carlos and also for the extra time that he will invest while helping.

Negotiation #4: Jessica

Elements of Negotiation:

1. Interests
Jessica is interested in have a loan in order to invest in her convenience store to recover from the
bad times she passed while she was ill
2. Legitimacy
She has a proven record of being a good client due to the timely payments she made of the
previous loans, furthermore she was sincere about the other loan that she had

3. Relations
Due to the great record of timely loans payments she had a good relationship with the company
and she had built confidence

4. Alternatives
To find a bigger loan with another microfinance institution
Slowly recovering her finance independence by reinvesting the money she earns from her
convenience store

5. Options
 To give her the $500 lempiras having a stretch control over her payments to “La Ceiba” and
the other institution making sure that she has everything under control
 To give her a bigger loan in order to allow her to repay the other institution loan and at the
same time invest some money in her business to recover her finance stability

6. Commitments
She has demonstrated to be a good client who always pays on time and she also demonstrated
that she knows how to successfully run her business in the past

Page | 6
 7. Communication
She has been honest, sincere and open with Scott and HHS.

Case Question:
Should Scott still agree to grant Jessica’s request for the smallest loan amount of 500 lempiras? If
not, what should Scott offer, if anything, instead?

Answer:
In my opinion is better that Scott offer Jessica a bigger loan in order to allow her to repay the
current loan that she has with the other institution and at the same time use the rest of the money
to invest in her convenient store in order to recover her financial stability

Conclusions
The “La Ceiba” is a rich case that present several mini cases within it. It gives the opportunity to
put in practice the case method analysis and at the same time to understand several negotiation
cases that implies not only to negotiate but also to make decisions in which ethics are involved.

In my opinion cases do not have a correct answer but all of them serve as interesting way to
challenge your mind and learn the elements of a successful negotiation. Thorough the analysis
and previous work in addition to the discussion that we will have in classroom, it will allow us to
get the most out of the case method and develop skills, knowledge, behavior and attitudes as
part of this learning process

Page | 7