Because of long histories of successful joint ventures and had been an innovative leader in foreign alliances for over 73 years, Corning's strategy of establishing the joint venture relationship with Vitro seems to be a ideal combination and will lead to success. However, the joint venture became subject to a series of cultural and other conflicts that began to undermine this vision. According to company officials and external analysts, cultural differences were a principal cause of the alliance's failure. Therefore, lack of fully understanding Mexico culture is the key predisposition of Corning's strategy.
What is culture? One of the well-accepted definitions is given by Goodenough (1971), who has defined culture as a set of beliefs or standards, shared by a group of people, which help the individual decide what is, what can be, how to feel, what to do and how to go about doing it. The main cultural clashes between two companies are discussed as follow: Different decision-making style between Mexican and American:
Vitro and other Mexican businesses are much more hierarchical, with loyalty to fathers and patrons somehow carried over to the modern corporation. As a matter of loyalty or tradition, decisions are often left either to a member of the controlling family or to top executives, while middle level managers are often not asked their opinions.
As a result, Corning managers who work in the joint venture were sometimes left waiting for important decisions about marketing and sales. Refers to a Corning executive: "If we were looking at a distribution decision, or a customer decision, we typically would have a group of people in a room, they would do an assessment, figure alternatives and make a decision, and I as chief executive would never know about it.” My experience on the Mexican side is that someone in the organization would have a solution in mind, but then the decision had to be kicked up a few levels.'
Different working efficiency:
The Mexicans sometimes saw the Americans as too direct, while Vitro managers, in their dogged pursuit of politeness, sometimes seemed to the Americans unwilling to acknowledge problems and faults. The Mexicans sometimes thought Corning moved too fast; the Americans felt Vitro was too slow.
Other difference in culture:
America is a advanced country in modern society with only 227 years history, traditional culture has far less important position than fashion in most Americans' mind, contrarily, traditional culture plays a significant role in Mexico, most Mexican are conservative even in large companies. For instance, Corning's offices in upstate New York are in a modern glass enclosed building, while Vitro's headquarters in Monterrey, often thought of as Mexico's Pittsburgh, are in a replica of a 16th century convent, with artwork, arched ceilings and antique reproductions. To sum up, attitudes, orientations, emotions, and expressions differ strongly among people from American or Mexican. These differences are fundamentally cultural. According to Hofstede's culture dimensions, we can get the conclusion as the table demonstrated below:
As shown in the table, although culture of both countries has masculinity characters, there is still a large culture gap in other aspects between American and Mexican. Therefore, without fully understanding Mexico's culture leads to the failure of Corning's alliance strategy with Vitro.
Cultural clashes among partners in joint ventures are not a new issue. Discuss why an MNC, and specifically Corning, would be interested in fully understanding the culture of a potential before deciding on an alliance.
Culture clash - the cultures of the companies are not compatible and compete for dominance. The businesses of both companies suffer while attention is diverted to the contest and it may destroy the key element of prior success. (Jeff Jacobs...