In the era of globalization and liberalization, it is very important for company to perform well and access to international market by acquisition, mergers, alliances or joint venture to survive and to keep market share in such a cut throat competitive environment. International business requires lots of practice and research of the host country's economical, political, legal, regional, cultural environment. Among all of these factors cultural difference is also one of the important issues for the success of international business. Failing doing so may lead any company to the failure of the business. NAFTA is encouraging multinational companies of US for joint venture with Mexican companies. As per the case study Corning is American company and Vitro is Mexican company. Both companies were doing very well after joint venture, in the market and as well at technological level. Still due to lack of understanding cultural differences and management style companies had to dissolve venture after 25 months, which indicates that before joint venture formed, companies should give more focus on the cultural understanding.
This report basically emphasize on the cross cultural issue. Corning is US based company and Vitro is Mexican based company. Both companies history indicates that they were earning large part of profit from joint ventures with other countries local companies. Taking considerations of only some similarities both companies decided for joint venture without prior study of the each others organizational culture. After joint venture both companies get benefits interims of quick market penetration and advanced technology sharing. Though joint venture was financially performing good, after 25 months this venture dissolved, giving reason that both were failed to understand each others organizational culture. There were conflicts with management decision style, employee involvement in management, work approach and behavioral differences. This report provides detailed indication and...