To what extent are cultural factors relevant in the success or failure of international joint ventures?
MN5132 International Human Resource Management
December 12th, 2013
Royal Holloway, University of London
Shrenik Shah
Introduction
Looking at the global corporate environment it is evident that it’s almost impossible for any company regardless of industry to be successful without having alliances with other organizations and so joint ventures are become one of quickest and safest ways for companies to expand into unknown territories. Many multi-national organizations have managed to gain exceptional growth, development and success through joint ventures. Joint Venture is where two or more company decide to sell product/service by pooling resources together and sharing the end result and in international joint venture at least one company goes outside of their home country to setup new entity. However, as the world is becoming smaller and more cosmopolitan every company witnesses more cultural mixture and so it’s become ever more complex for the firms to handle one standard culture in the company. Especially, cross border joint ventures.
Before looking into the relevance of culture in success and failure of Joint Venture let’s look at the definition of culture. According to Kluckhohn, (1951) culture is, decorated ways of thinking, exclusive achievements of human groups, feeling and reacting, acquired and transmitted mainly by symbols, their embodiments in artefacts; the essential core of culture consists of traditional, ideas and especially their committed values.
Analysis of Cultural factors for International Joint Ventures (IJV)
Author Cullen and Parboteeah ,(2008) classified culture into three major levels: (1) National Culture – local/host culture within the political boundary of nation; (2) Business culture – sustainable and ethical way of conducting business; and (3) occupational and organizational culture –...