Cultural Differences in Joint Ventures

ESSAY TOPIC (1) :A joint venture is affected by the cultural distance between two partners. In what ways are joint ventures and types of international collaboration affected by cultural differences?

INDEX

INTRODUCTION...........................................................................2

What is culture?...........................................................................2-3

The Cultural Orientation Model.......................................................4

The cultural Gap...........................................................................5-6

Understanding Cultural Differences.................................................6

The Challenge of Cultural Success..................................................7

Cross-cultural training as a solution................................................8

The effectiveness of the cross cultural training programs..................8-9

Future Directions for Cross-Cultural Training and International Business

Assignments................................................................................10.

Conclusion...................................................................................10

BIBLIOGRAPHY.............................................................................11

INTRODUCTION

Since the end of World War II, international operations have become a reality for an increasing number of corporations. Many of these initial efforts began as simple export schemes to sell goods overseas to supplement domestic sales. Over time, however, international operations have become increasingly more complex: from joint-ventures to purchasing existing foreign firms to 'green-field' start-ups. While export operations usually require no more than extended business trips overseas, more complex international operations demand long-term assignments of key personnel outside their home-country. What would normally be considered routine business transactions in the home country can become very complicated when they are conducted between individuals and organizations from different cultures. In this essay we will examine how this cultural gap can affect international business and joint ventures.

What is culture?

The word 'culture' is often described in terms of concrete ideas or social artifacts. Gary R. Weaver describes some common conceptions such as "good taste," "art or music," or "something that people in exotic foreign lands had."1 However, culture in the context of international assignments relates to how people perceive the world and the influence this perception has on their actions. It is culture on the interpersonal level. Different cultures can perceive the same thing differently, which leads to miscommunication and misunderstanding when one crosses into another culture not their own.

Weaver defines culture, on the interpersonal level, "as a system of values and beliefs which we share with others, all of which gives us a sense of belonging or identity" 2. He states that it can be discussed "in terms of typical ways in which people in a society, group or organization behave, communicate, think or perceive reality."3 Each culture has differing value and belief systems, which effect how people perceive reality and their following reactions to it.

A useful analogy to describe how culture impacts on the interpersonal level is that of computer software. Geert Hofstede has defined culture as the "software of the mind."4 Hofstede compares culture to a computer program, in that individuals learn and acquire patterns of thinking, feeling and acting over time that influence their actions and perceptions. He believes that culture is "mental software,"5 in that it predisposes individuals for certain inputs which are processed in a familiar way for a certain set of outputs, or actions. Hofstede states, however, that "a person's behavior is only partially predetermined by his or her mental programs: (s)he has a basic ability to deviate from them, and to react in ways which are new, creative, destructive, or unexpected."6 The 'mental program' is not absolute. It can change over time to react to new inputs and stimulus. If this were not the case, mutual understanding in intercultural communication would not be possible7 .

Not only does intercultural training enable communication in the procedural sense, it also "gives us insight into the substance as well as the process."8Being more sensitive to the cultural variance between parties enable the expatriate to better understand the context of why their foreign counterparts act in certain ways or demand certain items in negotiations. What may appear inconsequential on the surface may be revealed to have greater importance when looked at in the context of the host culture.

Intercultural understanding also has an informational aspect, according to Rohrlich. He states that "the intercultural contexting of world problems is the informational aspect that current intercultural communication theory, even in its rudimentary state, contributes."9 Better cultural understanding by an expatriate gives them a valuable data bank, in essence, about the host culture.

This information can assist them in better executing their work tasks or even the development of culturally appropriate products and services.

In summary, the home culture of an expatriate predisposes them to certain behaviors and situations. It allows them to operate efficiently in that environment. However, moving to the host-culture changes that operating environment and makes their 'mental software' less efficient and effective. Culture is clearly a relevant variable when expatriating employees and their families for international business assignments. Training can be applied to ameliorate these effects. Also, training provides insight into the procedural, substantive and informational aspects of their work and personal life in the host location.

The next chapter discusses the overall international assignment process. This provides a background