Joint Venture

Joint Venture

Executive Summary

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.

Joint Venture

Introduction

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 analysis of the possible reasons of failure of venture. Possible recommendations are given for this venture if want to joint again. US business culture and Mexican business culture give more idea to the companies to keep in mind some cultural differences to get success.

Joint Venture

A joint venture can turn under-utilized resources into profit, create a new profit center, and help you enter untapped markets, quicker and at less cost than trying it alone. Joint ventures are a popular method of expanding business. Major corporations and mid-sized companies are getting together, and small companies can, too, on a less formal basis.

A joint venture takes place when two parties come together to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the ...