Expert Answer:answer the following questions

Answer & Explanation:1. What is the difference between Direct effects and Indirect effects of Goals on choice of strategy? Explanation by using examples is mandatory.2. What is framing and how frames work in negotiation. Describe an example.3. Exercise 1. See attached file.Exercise 1 Instructions: According to the content of this exercise 1, apply the planning process for that negotiation by following all the points quoted on page 97 (Getting ready to implement the strategy. The planning Process). Please, assume any information or data omitted in the content at your best convenience to cover all the components of the planning process.Do not forget to answer the following questions: What is the frame for this negotiation? What are some misperceptions and cognitive biases in this negotiation?4. Exercise 2. See attached file.
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Exercise 11
Twin Lakes Mining Company
Introduction
In this role-play you wil have the opportunity to negotiate a serious problem-a conflct
between a mining company and the government of a small city regarding an environ-
mental cleanup. While the issues in this scenario have been simplified somewhat for the
purpose of this role-play, such conflicts between industry and governmental groups are
typical throughout the country. Try to introduce as much realism into this situation as
you can, based on your own personal experiences.
Background Information
The Twin Lakes Mining Company is located in Tamarack, Minnesota, in the northern
par of the state. It was established there in 1961. The city of Tamarack has a year-round
population of approximately 18,000. Although there is a growing revenue that accrues
to the city as a result of heavy summer tourism (summer homes, fishing, etc.) and several cottage industries, Tamarack is basically a one-industr city. Twenty-five hundred
people, 60 percent of whom live within city limits, work for the Twin Lakes Mining
Company; 33 percent of the city’s real estate tax base of about $5 millon consists of
Twin Lakes Mining Company property and operations. Both in terms of direct tax
revenue and indirect contribution to the economic stability of the local population,
Tamarack is strongly dependent on the continued success of the Twin Lakes Mining
Company.
The Twin Lakes Mining Company is an open-pit, iron ore mine. Open-pit mining
consists of strpping the topsoil from the ore deposit with the use of
power shovels. Train
rails are then laid, and most of the ore is loaded into railroad cars for transportation to a
central collecting point for rail or water shipment. As mining operations progress, rails
are relaid or roads constrcted to haul ore by trck. The ore is transported to a “benefication plant” located on the outskis of Tamarack. Benefication of ore involves crushing,
washing, concentration, blending, and agglomerating the ore. In the early days of ore
production, such treatment was unnecessar; however, benefication is necessar today for
several reasons. First, transportation costs of rejected material (gangue) are minimized.
The crude ore may lose as much as one-third of its weight in grading, and, in addition,
impurities are removed at a much lower cost than if removed during smelting. Second,
ores of varous physical and chemical properties can be purified and blended during this
process. Finally, fine ore materials, which previously may have been rejected as a result
of smelting problems, can now be briquetted and pelletized to increase their value. After
the ore proceeds though this process of cleaning and agglomerating into largerlumps or
pellets, it is shipped by railroad car to steel mils throughout the Midwest. Rejected
materials are retured to “consumed” parts of the mine, and the land is restored.
Twin Lakes’ benefication plant is located approximately five miles outside of
Tamarack. As a result of the expansion of the residential areas of the city, summer
514
Twin Lakes Mining Company 515
home development, and various Twin Lakes operations, the plant has become a major
problem for local citizens. For years, the Tamarack City Council has been pressing the
company to clean up the most problematic operations.
While most of these discussions have been amicable, Twin Lakes has done little or
nothing to remedy the major concerns. Now, as a result of more stringent environmental
laws and regulations, Twin Lakes has come under pressure from both the state of Minesota
and the federal government for environmental cleanup. Both the state and the federal
Environmental Protection Agency have informed Twin Lakes that the company is in
major violation of water and air pollution quality standards, and that immediate action
must be taken. Twin Lakes’ estimates indicate that total compliance with the cleanup
regulations wil cost the company over $36 milion. Because Twin Lakes is now mining
relatively low-grade ore and because foreign competition in the steel market has significantly eroded the demand for ore, environmental compliance may seriously influence
the profitability of the company. Many local citizens, as individuals and through the
local chapter of the United Mineworkers Union, are putting significant pressure on the
City Council to help the Twin Lakes Company in its environmental cleanup operations.
The imposition of the environmental controls on Twin Lakes, and the resulting pressure from all segments of the community, have led to renewed discussions between
company offcials and the City CounciL. As a result of these discussions, the following
environmental issues have emerged:

1. Water quality: The Twin Lakes plant requires large amounts of water to wash the
crushed ore. In addition, much of the highest-quality ore is reduced to an almost
powderlike texture after washing and is being lost in the washing operation. As a
result, the company has built a series of settlement recovery ponds alongside
Beaver Brook near the plant. Water that has been used for washing ore is aiiowed
to stand in these ponds; they are periodically drained and the ore recovered.
Nevertheless, granules of iron ore and other impurities continue to wash downstream from the plant. The environmental agents have insisted that the effuent
from the plant and the ponds be cleaned up. Estimates for the cost of a filtration
plant are $20 milion. Twin Lakes claims that it cannot afford to build the plant
with its own revenue. Since Tamarack has periodically talked about Beaver Brook
i

as a secondar water source for the city (and residential development makes this a

more pressing concern in two to three years), the Twin Lakes offcials hope that
they might interest Tamarack in a joint venture.
i
2. Air quality: The entire process of mining, transporting, and crushing ore generates
large amounts of dust. This has significantly increased the levels of particulates
in the air. In addition, during the dry summer months, the operation of many large
trucks along dirt roads intensifies the problem considerably. Twin Lakes believes
that it can control a great deal of the dust generated immediately around the plant
at a cost of approximately $8 milion. The most significant debate with the city
has been over a series of roads around the city outskirts. Approximately half
of the roads are city owned; the rest have been specially constructed for the
transporttion of ore and material. Estimates for paving all the roads are $4.8 milion,
with a yearly maintenance cost of $600,000; periodic oil spraying of the roads, to
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516 Exercises
keep down the dust, would ru approximately $800,000 anually, but an agreement
to do ths as a short-term measure may not satisfy the environmenta agencies.
3. Taxation of company land: The land for the mine itself is outside city limits.
However, the plant lies within city boundares, and curent taxes on the city land
are $800,000 annually. The company has always felt that this taxation rate is
excessive. In addition, several of the railroad spurs used to move ore into the
plant, and out to the major railway line, cross city land. The city has continued to
charge a flat rate of $400,000 annually for right-of-way use. It has occasionally
offered the land for sale to the company at rates varing from $2.2 milion to
$2.4 milion. Again, the company has felt that this rate is excessive.
Both the company and the city believe that if some resolution could be obtained on
these three major issues, the remaining problems could be easily resolved, and Twin
Lakes would agree to keep the mine open.
Exercise 2:
Tony taxpaer´s return has come up for audit by the Internal Revenue Service (IRS). He
took some deductions this year for an office in his home. Amelio Auditor at the IRS has
disallowed that deductions and invited Tony to come to the office to discuss that item as
well as a few other items on the return. Tony´s profession is tax consulting, and he
listed his occupation on his return as attorney. Tony has taken several deductions this
year that might be considered aggressive; however Tony believes that he has done no
wrong. In fact, he thinks he is being singled out due to his profession. He is short on
money and is worried about paying any additional assessment the IRS may make.
Therefore, he is planning on giving up the office deduction in order to close the audit as
quickly as possible. Amelio has never seen a home office deduction that was proper
except for his own during his pre-IRS days as an independent consultant.
1. Explain how perception affected each party´s negotiation goals.
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