Search

 
   

Why Most Joint Ventures Fail

Main Causes

 

 

 

International Business: How To Manage Cultural Differences  

Too many international joint ventures fail. Too few CEOs of international joint ventures characterize their business as "very successful".

Cultural differences is a common reason for joint venture difficulties.

 

 

 

According to Hewitt, the most common causes of joint venture failure are ❶ Cultural differences; Poor or unclear leadership, and ❸ Poor integration process.

Below are some factors that contribute to the poor track record of international joint ventures:

▪ Conflict over delegation of decision-making to the local joint venture management by a foreign partner which sees the JV operations as only a small part of the global picture and is trying to maximize profits globally, while the local partner is trying to maximize profits locally.

Disagreement between the partners over operating policies, strategies, and tactics in the local market.

Differences in the approach of each partner towards management style (decision-making, communication, delegation, and so on) and systems (performance management, accounting, control, and so on)

 

 

   

Managing Cultural Differences

 

 

 

 

If you wish to reach foreign buyers or sellers or need to bring joint venture projects to a successful outcome, you must be culturally competent. You must understand intercultural communication and effectiveness if you wish to avoid such serious problems as:

→ Unmet commitments from suppliers;

→ Stalled joint projects, deals coming undone;

→ Frequent miscommunications, failed meetings, and unanswered routine communications;

→ Low productivity.


Cultural Differences To Be Addressed

According to Geert Hofstede, cultures – both national and organizational – differ along many dimensions.

The four of the most important are:

Directness (get straight to the point versus imply diplomatic messages)

Hierarchy (follow orders silently versus engage in debate first)

Consensus (dissent is accepted versus unanimity is needed)

Individualism/Collectivism (individual winners versus team effectiveness)

 

 

 

   

How to use this information

 

 

 

 

① "Adapt what is useful, reject what is useless, and add what is specifically your own." ~ Bruce Lee

② Sleep on this information – your powerful superconscious mind will tell you how to use it when you wake up

  Cultural Differences Cultural Differences Vadim Kotelnikov Cultural Intelligence Visible Cultural Differences Barrieirs to Cross-Cultural Communication Beliefs and Values Subconscious vs. Conscious Cultural Differences hidden and visible, tree metaphoric model

 

Learn

 

Cultural Intelligence

 

Teach