Multinational Corporations and Business Negotiation Under the Monroe Doctrine: Lord Cowdray and Oil Politics in Colombia

Multinational Corporations and Business Negotiation Under the Monroe Doctrine: Lord Cowdray and Oil Politics in Colombia

images (2)Marcelo Bucheli
Assistant Professor
Department of Business Administration,University of Illinois at Urbana-Champaign College of Business
1206 S.Sixth Street,MC 706 Champaign,IL 61820 USA
E-mail: mbucheli@uiuc.edu
Phone:1 -217 – 244 0208
Fax:1 – 217-244-7969

Abstract
The bargaining power of a multinational corporation negotiating with a poor country in
the extractive sector can be determined by the host country’s local politics,the relationships between the host country and the multinational’s home country,and the power of other countries.This paper explores the negotiations for oil concessions between the British oil firm Pearson and Son(owned by Weetman Pearson –Lord Cowdray)and the Colombian government in 1913.Despite the mutually beneficial terms of the contract negotiated between the company and the government,the negotiations failed.I argue that the collapse of the negotiations was a result of the company’s little understanding of Colombia’s domestic politics(this was the Pearson’s first experience at negotiating in a poor country with strong legal political parties),its underestimation of United States opposition to Pearson’s encroachment into “US territory,”and a narrowminded British policy of protection of British investors abroad.

Negotiating Business Under the Monroe Doctrine: Weetman Pearson and Oil Politics in Colombia

In November 27, 1913,Weetman Pearson,First Viscount Cowdray,announced to the British press in London the withdrawal of his engineering and oil firm,Pearson and Son,from the negotiations over oil concessions with the Colombian government.

Multinational Corporations and Business Negotiation Under the Monroe Doctrine: Lord Cowdray and Oil Politics in Colombia

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