Case study on International Joint Ventures

The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.

Does not in any way imply the existence of a society that is less or more humane than another, it simply denotes the social structure

Power Distance Index

UK: 35

Japan: 54

Problems in relation to Japan/UK: Relationship between the superior and

the subordinate, mainly when British is subordinate of Japanese In UK: Validation and defending of a

superior’s role is expected But if British subordinate challenges

superior’s role, would be accused of being offensive

Problems in relation to Japan/UK: Interaction between subordinate and

superior In Japan: Initiatives taken by the middle

management Superior plays a very vague role when it

comes to making a decision in order to protect him from losing face

Problems in relation to Japan/UK: Interaction between subordinate and

superior In UK: Superior makes decision based on

subordinates opinions Takes full responsibility for decision If wrong choice made, no less respect from

subordinates

Problems in relation to Japan/UK: Interaction between Japanese and UK

Japanese say things ambiguously, need to listen to underlying tones

British direct and frank

Individualism: loyalty to oneself Collectivism: loyalty to family or groupHowever, Citizens of an individualist culture are

more likely than not to be part of volunteer organizations or join the military voluntarily

Hence, a very unclear definition given.

In Hofstede’s surveys: Individualism indicated in questions

relating to the availability of personal time, the amount of freedom given to an employee in solving a problem and the presence of challenging work to accomplish.

In Hofstede’s surveys: Collectivism was indicated by the

training opportunities given, the physical conditions of the work environment and the use of ones skills on the job.

Individualism Index Value (IDV)

UK : 89

Japan: 46

Japan: Organisation orientation Factors in the external market are of

less importance with regards to employment in the company

UK: Market orientation Job aspects (eg. Pay) dependent on

market value

Japan: Inclined to run machinery unattended Strive to attain multi-machines operation UK: Would rather run them with operators

who have had previous experience Contented with the distribution of one

operator for each machine

Minimizing uncertainty in the form of rules

and structures

Japan:92, UK:35

Trust

Reputation

Hierarchy structure

Attention to the future versus the past

and present

Japan:80, UK:25

Affects the way decisions are made

All business relations are long term

Ability to engage in a set of behaviors that uses

skills (e.g. language or interpersonal skills) and

qualities (e.g. tolerance for ambiguity, flexibility)

Tuned to the culture-based values and attitudes

of the people with whom one interacts

Definition

Consists of a multiple intelligence and emotional

intelligence as mentioned by Howard Gardnerand Daniel Goleman

There are four aspects mainly Linguistic Spatial Intrapersonal Interpersonal

Successful interaction with people from other cultures whose native language is different from their own

In our case study, interaction between the British and Japanese counterparts would require genuine interest to bridge the language barrier

Constructive efforts to learn as much of the other language as possible

For e.g. assuming a British colleague learns some key words or lingo of is/her Japanese counterpart, this would definitely foster a more cohesive work environment

Understanding the proper behaviours that would facilitate a proper introduction without any embarrassment

For e.g. Asians and particularly Japanese people show courtesy by bowing slightly or even opening doors for others

However this is considered ridiculous in the Western culture

Thus ability or failure to adapt different spatial behaviours could make our international counterparts comfortable or ill at ease

This in turn leads to various levels or success or failure in face-to-face cultural interactions

Understand one’s own unique cultural style Allows easier comparison with others and

thus the appropriate adjustment to behaviour to be compatible to cross-cultural settings

Intrapersonal intelligence could be improved only if one strive’s to learn one’s own cultural style better

An important aspect of cultural intelligence

Successful interaction with people from other cultures is the heart of cultural intelligence

According to Gardner, interpersonal intelligence goes beyond just the language aspects and is described as the ability to “read the intentions and desires of others, even when they have been hidden”

For professionals to be successful in international interactions such ability to “read” people and anticipate their motivations and desires is crucial

IMPROVING CULTURAL INTELLIGENCE Developed through three means:

Head / Cognitive (learning about beliefs, customs, and taboos of your own and other cultures)

Body / physical (using your senses and adapting your movements and body language to blend in to your foreign hosts, guests, or colleagues simply by showing you understand their culture)

Heart / Emotional / motivational (Adapting to a new culture by overcoming obstacles and setbacks. People can do that by gaining rewards and strength from acceptance and success).

Examine the motivation for learning about other cultures

Develop the mindset that there is more than just one set of thinking as opposed to refusing to accept other viewpoints

This could be cultivated through learning, evolving and thus gaining perspective.

Merely memorizing a list of dos and don’ts is difficult as it differs within countries

Way of behavior in other cultures is critical

For instance, Americans and Japanese have differing styles when presenting their name cards

When presenting a business card to a Japanese colleague, one should mention “Hajima mashite”, meaning “Pleased to meet you” in a slight bow and using both hands to give the card shows a sense of respect towards the receiver and the business card

However from the Westerners context, like the British, a business card is for practicality. Thus very little consciousness to show to towards the presentation of the business card

Vulnerable to failure due to cultural misunderstandings.

Paterson and Shimada (1978): cultural differences led to failure on the part of parent company managers to “understand” one another.

Resultant communication breakdown - Collapse of the venture.

Faulkner, in his research, found that the following attitudes were outstandingly associated with joint venture success:

Commitment by top management Mutual Trust Sensitivity to company culture Commitment at lower levels Sensitivity to national culture Information widely disseminated Good dispute resolution mechanisms Reviewed Learning

• Individual & organizational levels

• Cultural Intelligence as the fundamental basis

• Cultural mix of people not as a problem BUT as an ASSET (Cognitive)

Training of managers and other employees trained and prepared for the difficulties of building cross-

cultural working relationships.

Sending employees of partner cultures together on these courses might be useful encourage the building of informal inter-cultural contacts.

Such would strengthen and develop the physical and emotional aspects of cultural intelligence.

• Having and developing cross-cultural empathy (emotional aspect of cultural intelligence) would also prepare staff for cross-cultural understanding and lead to joint venture success.

Multicultural work teams could be built prior to as well as after the establishment of the joint venture.

Clear communication channels and mechanisms could be put in place to avoid misunderstandings.

Adequate efforts in educating joint ventures assignees about the strategic intent underlying partnership.

Ensure sufficient economic and career incentives for sustained learning within and across strategic business units.

Summary & Conclusion

Application: Joint

Venture

Hofstede’s 5

Dimensions

Improving Cultural

Intelligence

Cultural Intelligence

Cultural Diversity