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Cross-Cultural Alliance


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Title: Cross-Cultural Alliance

Cross-Cultural Alliance
Presented by 4980356 Kantiya Lertwongtrakoon
Section 2 4980386 Nannapas Thirawongpaisal
Section 2 4980661 Sutawan Chanprasert Section
2 4980130 Deepak Kundnani Section 2
Cross-Cultural Alliances
  • People who spent in another culture will
    understand more about dynamics of a business
  • In cross cultural situation, the process of
    alliance building and the Mindshift principle
    remains valid.
  • Managers should understand cultural
  • Cross cultural alliance can provide great benefit
    for companies experienced in doing them.

Success or Failure at Corning
  • Corning has formed more than fifty international
    joint ventures. One of the success alliances is
    with Samsung.
  • Corning had invented the all-glass television
    tube and was a major supplier for worldwide but
    needed better access to Asian markets.
  • Samsung wanted to move into television

Success or Failure at Corning
  • The mutuality existed, and the cultural
    differences were manageable, since both parties
    appreciated what the other company had to offer.
  • - Corning recognized and valued Samsungs
    knowledge of the market and sale expertise.
  • - Samsung valued the technology and supplier
    experience that Corning had developed over the
  • Alliance helped reach both parties 'goals.

Successful intercultural collaboration on a grand
  • The Airbus project had four partners that came
    from different countries.
  • - Britain, Spain, West Germany, and France
  • Each group had its responsibility that well
    defined and mutually goal for each team to
  • The management of the project was decentralized
    so that decision making was on the local level
    which helped to reduce the possibility for

Successful intercultural collaboration on a grand
  • By dropping the tariff barriers in European
    Community does not mean that there is now a
  • National Cultural differences are strong as ever.
  • - There are great differences in style,
    philosophy, and language among the Airbus team
  • However, the collaboration and desire to achieve
    the project had drove the venture to be

  • Before developing the cross cultural alliances,
    you have to look at the subcultures within many
    country cultures.
  • Example
  • The degree of formality is an element of a
    countrys culture, but in US it differs greatly
    among subcultures.
  • Not all subcultures are geographical. In
    insurance and banking, suits are the general
    dress code no matter where you are

  • Regional, ethnic, religious, and industry
    subcultures are just a few examples of
    subcultures within a country.
  • Executives must learn personal cultural self
  • Understand how to integrate corporate culture and
    country culture into management systems that can
    work in both their country and others.

Cross-Cultural Learning Exchanges
  • Benefit that is often undervalued in
    cross-cultural alliances is the transfer of
    techniques that work in other countries back to
    your country.
  • Example
  • U.S. companies presume that they will always be
    in the position of teacher and the international
    partner in the position of learner.
  • - Major opportunities are lost by taking this

Motorola Management in Malaysia
  • Motorolas plant in Malaysia is regarded as the
    best in productivity, quality, and innovation in
    the companys Land Moblie Division.
  • The quality control program allows employees to
    make recommendations which helped company to save
    2 millions.
  • - It made employees feel that they are being a
    part of the company. They thought in terms of the
    good of the group rather than the gain of

Motorola Management in Malaysia
  • This program was not successful in US. This is
    because people in U.S. value the individual and
    their own personal gains above the group.
  • The program has been modified for the U.S.
  • - Company changed to provide individual
    incentives and required employees to develop a
    team approach. Workers were moved to go along
    with the idea of contributing the suggestions.

Shifting Labor Market
  • In a global economy, works has been migrated to
    wherever quality, cost, and efficient can be
    managed in order to get a better return on
    capital and time invested.
  • Example
  • South Korea is becoming influential worldwide in
    the area of memory chips.
  • Cross-cultural competition for labor and
    technology is a reality that impacts every
    company that does business internationally.

The Cross-Cultural Interpreter
  • One effective tool for managing the challenge of
    cross-culture alliance is the interpreter.
  • Interpreter is someone that comes from or has
    lived in both your and the partners cultures.
  • They would understand the verbal and nonverbal
    communication and perception in both cultures.
  • In some culture it is important whether people
    involved come from and in-group or and out-group.

Understanding Values Across Cultures
  • To compete in the global arena, firm need
    international partners and alliances on various
    level of the pyramid.
  • Company need to understand cultural perceptions
    of value.
  • Developing alliance has enabled the company to
    minimize their capital investment.

Riding the Political Waves Honeywell in Russia
  • Honeywell Company has been established for 20
    years in the market.
  • This company used it understanding of political
    uncertainty and understanding to select the
    partner in the business alliance.
  • At first they took a position of 49 percent in
    the JV with the Ministry of Mineral Fertilizer,
    after that they increase to 50 and 70 afterward.
  • They put the value of joint venture through
    ability to learn from the partner in order to
    avoid failure of this alliance.
  • 3M emphasized on political and business point of
    view, therefore, the problem of miscommunication
    and failure will rarely occurred.

Japanese Executives only, please!
  • The chairman of 700 million Japanese
    telecommunications noticed that you cant live
    in your own world anymore, and alliance with the
    partner is not a bad choice
  • Idea and strategy?they will make all decision at
    home office in Japan.
  • Problem? less competitive due to all decisions
    making have been made by Japanese committees
    from headquarter.
  • Solution? The understanding of the partnering in
    global economy should also be transferred in the
    decision making as well.

  • Sony is a multinational conglomerate corporation
    headquartered in Minato, Tokyo, Japan, and one of
    the world's largest media conglomerates
  • Creativity involvement and decision making is a
  • the majority of the decision making is come from
    non-Japanese executives more than Japanese
  • English-speaking skills are highly valued at Sony
  • The quote from Mr. Tamotsu (Sonys executive
    deputy president) is We hire and promote people
    mainly for their ability to do business But if
    you cant speak English here, you cant fully do
    your job.

Four elements of the country culture.
  • Power Distance How the culture accept the
  • power in organizations (equal VS unequal)
  • Uncertainty Avoidance The society feels
  • threatened by uncertain situations or not.
  • Individual/Collectivism
  • Individualism a loosely society ?take care of
  • themselves
  • Collectivism a tight society in which ? take
  • care one another. (Ex. People look after each
  • and in turn for loyalty aspect).
  • Masculinity/ Femininity Masculinity is the
    extent to which the dominant values in society
    are money, not caring others, quality of life of

Hofstede ranking
  • Power Distance USA ranked number 25Americans
    are not willing to accept power difference among
    group or individuals. They are more open to share
    idea and feel free to vote.
  • Uncertainty Avoidance They ranked 31st they
    are not really scared of changes in every day
  • Individual ranked the 1st very independent
  • Muscularity ranked 12th

Cultural Differences- The European Management
Forum Survey
  • It is an annual report on international
    competitiveness published a
  • summary of the survey.
  • They examined the perspective
  • of the manager toward culture.
  • 1) Motivating the workforce
  • How great is the sense of drive, responsibility
  • and entrepreneurship among managers
  • of your nationality?
  • How willing to identify with corporate
  • objectives and priorities are the workers of
  • your nationality?

1) Motivating the workforce
  • Shows the result when 2 questions have been
    asked. Those two questions are
  • How great is the sense of drive, responsibility
    and entrepreneurship among managers of your
  • How willing to identify with corporate objectives
    and priorities are the workers of your

1) Motivating the workforce (Cont).
  • 1st question it showed vertically as the
    estimate of talent of the nations management.
  • Ex. The highest rank were US, followed by HK,
    Sweden, JP, TH and West Germany
  • 2nd question it showed horizontally.
  • Ex. JP placed far right hand side, followed by
    Taiwan, South Korea

Business in USA
  • Most of the companies in USA use the system of
    equally individual oriented cultures which lead
    to generate more of the new ideas and
  • For example, Apple computer which show the
    successful business company in US.
  • They claim that using the individual contribution
    is greatly valued as a part of corporate culture.

Business in USA
  • The management talent is needed in Brazil because
    the country has low level of visionary managers
    to motivate the workers
  • This results in forming alliances across cultures
  • Problems still occurred because it might get some
    managers that does not fit with the cultural
    norms and workers sometimes do not like changes

Delegating Authority
  • Are managers willing to let their workers take
    responsibility of a given task or not?
  • Japanese ranks the highest before Sweden and the
    United States

Marketing Push and Product Quality
  • The countries with the highest reputation in both
    market push and high quality products were Japan,
    Switzerland, and Sweden
  • The question that is used to asked related to the
    abilities of managers to sell product and how it
    link to the quality of product sold.

Willingness to create and exploit technological
  • The last question is the relationship between the
    stated readiness of corporations to exploit
    innovation and the average number of patents
    granted per 100,000 inhabitants of the country
  • Japan scored the highest in number of patents.

Planning the Cross Culture Alliance
  • The key skill of managers involved in building
    alliances must be the ability to work in
    ambiguous, unfamiliar, cross-functional, and
    transcultural relationships.
  • The home office also has to recognize the
    constraints as well as the opportunities in
    international markets also adjusting their own
    perceptions of time, leadership, and reward to
    fit the cultural norms

Making Shoes in China
  • Attitude of Chinese
  • Closely-knit group of villagers that used to be
    farmers, but is now involved with commerce.
  • Alliances with firms from Taiwan, Japan, and
  • Work together as a collective.
  • Maintain group harmony and overt conflict in
    interpersonal relationships.
  • Attitude of American
  • Americans looked at the project as experimental.
  • American owner had an entrepreneur attitude that
    was aggressive and did not tolerate process,
    praises sales, and believes his way is the best
    way of doing business.
  • Culture Clash
  • Many problem with manufacturing quality and
  • American Manager visit.
  • Younger American owner visits.
  • Chinese wanted personal relationships, Americans
    wanted professional relationships.

Swedish Pharmaceuticals in U.S.
  • Attitude of Swedes
  • Strong commitment and sense of identification
    with the corporate entity.
  • Understand the importance of the American
  • Looked at the American company they were
    partnering with as a big asset.
  • Attitude of Americans
  • Looking to expand their market and were also
    interested in the technology that the Swedish
    firm had.
  • John Wayne style negotiation.
  • Wanted to have research and development of
  • Culture Clash
  • Lack of cross-cultural teams containing the
    talent necessary to achieve the goals of the
  • Misalignment of the partners objectives.
  • Problems could have been avoided if only the
    Swedish firm had been less Adventurous and had
    taken part in the American teams.

Migratory and Embedded Knowledge and Culture
  • Critical to understand the issue of cultural
    differences and language communication in
    developing an international alliance.
  • U.S. companies in China have discovered that the
    Chinese mostly value the embedded knowledge much
    higher than the migratory
  • The Chinese view the contracts as a ongoing
    negotiation process, that can be changed as more
    parties are involved.
  • Unintended Knowledge Transfer
  • A U.S. firm in an alliance with a Chinese firm
    had felt that they had been taken disadvantage by
    the Chinese.
  • The U.S. partner had decided to redirect their
    efforts to key families in India, where they
    could limit the knowledge transfer.
  • Understanding the cultural differences could have
    avoided all the waste, and they may have decided
    to work in India from the start.
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