Cross-Cultural Alliance

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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
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Cross-Cultural Alliances

• People who spent in another culture will
  understand more about dynamics of a business
  situation.
• In cross cultural situation, the process of
  alliance building and the Mindshift principle
  remains valid.
• Managers should understand cultural
  dissimilarity.
• Cross cultural alliance can provide great benefit
  for companies experienced in doing them.

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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
  manufacturing.

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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
  years.
• Alliance helped reach both parties 'goals.

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Successful intercultural collaboration on a grand
scale

• 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
  succeed.
• The management of the project was decentralized
  so that decision making was on the local level
  which helped to reduce the possibility for
  misunderstanding.

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Successful intercultural collaboration on a grand
scale

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

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Subculture

• 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
  geographically.

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Subculture

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

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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
  attitude.

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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
  individual.

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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.
  culture.
• - 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.

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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.

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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.
  

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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.

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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.

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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.

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Sony

• 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
  key
• the majority of the decision making is come from
  non-Japanese executives more than Japanese
  themselves.
• 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.

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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
  others
• 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
  others.

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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
  life.
• Individual ranked the 1st very independent
  country
• Muscularity ranked 12th

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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?

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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
  nationality?
• How willing to identify with corporate objectives
  and priorities are the workers of your
  nationality?

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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

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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
  creativities.
• 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.

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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

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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

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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.

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Willingness to create and exploit technological
innovation

• 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.

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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

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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
  Korea.
• 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
  deadlines.
• American Manager visit.
• Younger American owner visits.
• Chinese wanted personal relationships, Americans
  wanted professional relationships.

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Swedish Pharmaceuticals in U.S.

• Attitude of Swedes
• Strong commitment and sense of identification
  with the corporate entity.
• Understand the importance of the American
  language.
• 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
  product.

• Culture Clash
• Lack of cross-cultural teams containing the
  talent necessary to achieve the goals of the
  parties.
• 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.

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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.