BADM 1004 Lecture Notes - Lecture 8: Sunk Costs
Document Summary
About shell, career in shell: obsolescing bargain: To develop oil or gas field a company has to explore and develop. Exploration = spend billions looking to see if the oil and gas is there. Development = spend billions drilling wells and building pipelines. Problem is that if the investment doesn"t work out, all the money is gone. If it does work, operating costs are very low, can recoup its initial investment. Any government powerful enough to adjudicate property. The arbitration: very expensive and very bad, only 13 cases against us, none ever lost. If company wins (40%) then it goes to enforcement if government doesn"t pay. Courts can enforce and this is serious. Russia, israel, france, spain, italy, us: avoids confrontation/emotionally expressive. Saudi arabia, india, brazil, mexico, philippines (gcc: avoids confrontation/emotionally unexpressive. Uk, sweden, korea, japan: confrontational/emotionally unexpressive. Do not fly blind: cultural navigation, deal-making, leadership. Find out more about each stakeholder before a meeting.