La Ceiba: Navigating Microfinance and Relationships in Honduras (A)

By: Christine Exley and John Beshears and Alison Wood Brooks

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Synopsis: This case follows the program director of La Ceiba, a Honduras-based microfinance institution, as he navigates four challenging negotiation scenarios involving the organization's loan clients. Students are asked to adopt the perspective of the Program Director and to consider how they would act in these negotiation scenarios that are characterized by unclear objectives and severely asymmetric power dynamics. How should they approach negotiation situations in which the power balance is heavily in their own favor? Should they exert this power and engage in a “hard” negotiation approach? Or, are there circumstances where a “soft” negotiation approach is warranted? In addition to helping students develop a framework about when to use soft versus hard negotiation approaches, two of the notable lessons that arise are (i) the role of apologies after misusing power and (ii) how even “using one’s power for good” can translate into paternalistic outcomes.