Cultural Distance and the Performance of International Joint Venture

International Business & Management Dissertation

Project Report , 2013 , 31 Pages

Business economics - Business Management, Corporate Governance

In the Global Market, Internarional Joint Ventures (IJV) are becoming prevalent phenomeno and many multination companies have managed to experience considerable growth by making alliances (such as Joint Ventures). There are several factors which needed to be controlled carefully, otherwise it would be resulted in weaken the performance of the specified IJV. It has been estimated that about 37-70 percent of IJV are reported to experience the performance problems incurred due to the cultural differences and thus leaded the specified ventures towards the costly Culpan (2002) explained International Joint Venture (IJV) as the process which includes two or more companiess belong to different countries to collaborate together.The decision to decide wheather or not to make a joint ventures included four different stages (Initial, Formation, Operation & Outcome). There are two kinds of cultures which directly makes an impact on the Joint Venture. The first one is the organisational culture and the second type of culture is the national culture. Pothukuchi, et al. (2002) stated that the problem arises in IJV is because of significant Impact of the national culture upon the behavioral and management system which then directed towards conflicts. Same case is observed in the organisational culture as well where any differnece or dispute can cause conflict and also can destablise the Joint Venture’s performance or progress. The case study of Sony Ericsson also fallows the same approach of the Joint Venture as it was collaboration between two multinational companies (Sony & Ericsson) who were coming together with intention of single corporate which could not be possible for both companies to accomplish on the individual basis. It has been found out that the organisational cultural difference has negative impact on the performance of the International Joint Ventures (IJV). On the other hand, national cultural difference can pose either positive or negative impact but the intensity of that difference is not much aggressive. The emphasis of companies engaged in International Joint Venture on the factors which would be resulted in overcoming national cultural difference problems and also on developing the management which would be acceptable for both partners to adopt and implement could contribute extensively to the success of International Joint Ventures.

Inhaltsverzeichnis (Table of Contents)

• CHAPTER-1: AIMS & OBJECTIVES
  • 1.1. BACKGROUND CONTEXT.
  • 1.2. RESEARCH QUESTION.
  • 1.3. RESEARCH OBJECTIVE.
  • 1.4. SUMMARY.
• CHAPTER-2: LITERATURE REVIEW
  • 2.1. INTERNATIONAL JOINT VENTURES (IJV) AS A CONCEPT
    • PROCESS OF INTERNATIONAL JOINT VENTURES (IJV).
  • 2.2. CULTURES WITHIN THE IJV
  • 2.3. NATIONAL CULTURE
    • 2.4.1. DIMENSIONS OF NATIONAL CULTURE.
      • 2.4.1.1. POWER DISTANCE...
      • 2.4.1.2. UNCERTAINTY AVOIDANCE.
      • 2.4.1.3. INDIVIDUALISM & COLLECTIVISM..
      • 2.4.1.4. MASCULINITY AND FEMININITY.
      • 2.4.1.5. LONG-TERM AND SHORT-TERM ORIENTATION
  • 2.5. ORGANISATIONAL CULTURE
    • 2.5.1. DIMENSIONS OF ORGANISATIONAL CULTURE.
      • 2.5.1.1. PROCESS VS RESULT ORIENTATION.
      • 2.5.1.2. EMPLOYEE VS JOB ORIENTATION
      • 2.5.1.3. PAROCHIAL VS PROFESSIONAL ORIENTATION
      • 2.5.1.4. OPEN VS CLOSED SYTEM ORIENTATION
      • 2.5.1.5. LOOSE VS TIGHT CONTROL ORIENTATION..
      • 2.5.1.6. NORMATIVE VS PRAGMATIC ORIENTATION.
  • 2.6. SUMMARY.
• CHAPTER-3: CASE STUDY
  • 3.1. CASE STUDY ON INTERNATIONAL JOINT VENTURE: "SONY ERICSSON".
    • 3.1.1. MOTIVE OF JOINT VENTURE...
    • 3.1.2. PROCESS OF INTERNATIONAL JOINT VENTURES (IJV).
    • 3.1.3. PARTNERS' CULTURES
      • 3.1.3.1. PARTNER-1 (ERICSSON) CULTURE.
      • 3.1.3.2. PARTNER-2 (SONY) CULTURE..
    • 3.1.4. COMPARATIVE ANALYSIS
  • 3.2. SUMMARY
• CHAPTER-4: DISCUSSION & CONCLUSION
  • 4.1. DISCUSSION
  • 4.2. CONCLUSION
  • 4.3. RECOMMENDATIONS FOR FUTURE STUDIES

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This study examines the implications of cultural differences in the context of International Joint Ventures (IJVs). It investigates how cultural incompatibility between partners can affect the success of these ventures, particularly in cross-border alliances. The report incorporates a case study to analyze the complexities of cultural differences in the Joint Venture process.

• The prevalence and significance of International Joint Ventures in the global market
• Cultural differences as a crucial factor influencing the success of IJV's
• The impact of national and organizational cultures on Joint Venture performance
• The role of cultural compatibility in the formation and operation of IJV's
• The potential for cultural differences to lead to conflict and instability in IJV's

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter 1: This chapter establishes the research question and objectives. It discusses the rising prominence of International Joint Ventures (IJVs) and the challenges they face, particularly in navigating cultural differences. The chapter emphasizes the importance of understanding cultural dynamics to ensure successful collaboration and sustainable growth.
• Chapter 2: This chapter reviews the relevant literature on IJV's and the cultural factors that influence their performance. It examines key concepts like national culture, organizational culture, and the impact of cultural differences on joint ventures.
• Chapter 3: This chapter presents a case study of Sony Ericsson, a prominent international joint venture. The study examines the motivations behind the partnership, the cultural dynamics of the participating companies, and the challenges they faced in managing cultural differences.

Schlüsselwörter (Keywords)

The primary focus of this study is on the impact of cultural differences on the success of International Joint Ventures. Key themes include the interplay of national and organizational cultures, the challenges of cultural incompatibility, and the importance of cultural sensitivity in navigating cross-border alliances.

• College: University of Bedfordshire
• Course: International Business & Management
• Author: Junaid Javaid (Author)
• Publication Year: 2013
• Pages: 31
• Catalog Number: V232217
• ISBN (eBook): 9783656497820
• ISBN (Book): 9783656498827
• Language: English
• Tags: cultural, distance, performance, international, joint, venture, business, management, dissertation