Cross-Cultural Alliance

1. Cross-Cultural Alliance Presented by 4980356 KantiyaLertwongtrakoon Section 2 4980386 NannapasThirawongpaisal Section 2 4980661 SutawanChanprasert Section 2 4980130 Deepak Kundnani Section 2

2. 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.

3. 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.

4. 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 Samsung’s 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.

5. 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.

6. 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.

7. 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 country’s 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.

8. 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.

9. 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.

10. Motorola Management in Malaysia • Motorola’s plant in Malaysia is regarded as the best in productivity, quality, and innovation in the company’s 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.

11. 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.

12. 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.

13. 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 partner’s 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.

14. 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.

15. 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.

16. Japanese Executives only, please! • The chairman of $700 million Japanese telecommunications noticed that “you can’t 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.

17. 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 (Sony’s executive deputy president) is “We hire and promote people mainly for their ability to do business”“But if you can’t speak English here, you can’t fully do your job.

18. 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.

19. Hofstede ranking • Power Distance: USA ranked number 25—Americans 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

20. 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?

21. 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?

22. 1) Motivating the workforce (Cont). • 1st question: it showed vertically as the estimate of talent of the nation’s 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

23. 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.

24. 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

25. 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

26. 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.

27. 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.

28. 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

29. MakingShoesinChina • 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. • 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. • Culture Clash: • Many problem with manufacturing quality and deadlines. • American Manager visit. • Younger American owner visits. • Chinese wanted personal relationships, Americans wanted professional relationships.

30. SwedishPharmaceuticalsinU.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.

31. 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.