According to Webster's online dictionary, a joint venture is an enterprise in which two or more companies or more enter into a temporary partnership. Vitro and Corning share a customer-oriented philosophy and remarkably similar corporate cultures which could help the venture to be successful between the two countries. This was a great opportunity given that the two companies shared similarities in history, customer orientation philosophies, goals and objectives.
In US there was low power distance that resulted into flatter, decentralized structures in which top management would let the people on the bottom make decisions and listen to them. On the contrary, in Mexico the high power distance meant that it is only the top management that could make all decisions. The US believed in competition in which they aimed to be better at selling whereas Mexico focused on cooperation whose main focus was on product reliability. These cultural differences led to the failure of the Corning-Vitro venture between US and Mexico although it was to the expectation of many that their joint venture would be a great success in the global market.
Hofstede studied cultural variances among various countries and classified their values across four dimensions of power distance, uncertainty avoidance, masculine or feminine and individualism or collectivism. In the case of US and Mexican cultures according to Hofstede's scheme, the two cultures had so many differences than similarities. On the issue of power distance, the United States has a low power distance consisting of flatter and more decentralized structures. In this, the people in the top management would allow the personnel from the bottom-levels in the organization to make decisions. However, Mexico had a high power distance and that was not the case. Vitros heads of the corporation made decisions and the bottom would follow those orders. Additionally, Americas Corning had low uncertainty avoidance, and they were willing to accept risks of the unknown. Conversely, Vitro had high uncertainty avoidance and they needed high security before taking any risk.
After Hofstede examined on individualistic of a country, it was found out that America's Corning are high on the individual making them wealthier which had greater initiative in protestant work ethic and greater individual initiative. Mexicos vitro is collectivist resulting in poorer conditions and less individual initiative in this case, Catholic. America, specifically Corning, is Masculine which means that they earn more stress and more focus on obtaining wealth, recognition and advancement. Nevertheless, Mexico and its company vitro are more feminine in that they are more focused on cooperation, creating a friendly atmosphere and employment security.
The problems that arose between Corning and Vitro were that Corning was decentralized, and this meant that middle and lower level managers were involved in the decision-making process. Vitro on the other hand is very centralized and has all top management make all the important decisions. Another set of problem, arose from their informal and formal approaches of doing business.
Moreover, Corning encouraged competition amongst its employees, while Vitro emphasized on cooperation. Corning was believed to push for more sales, better production and more ways to beat out their competitors. Vitro did not put emphasis on competition but rather cooperation among its workers. Notably, these differences can be managed by creating an understanding of culture and management practices before entering into joint ventures.
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