CROSS CULTURAL CONFLICTS

THE CORNING-VITRO JOINT VENTURE

Derrick QualsRyan Huelsmann

Corning Incorporated Famous for Oven-ready glassware Other diversifications:

Fiber Optics Environmental products Laboratory Services

Has had previous success in globalization and Joint Ventures with other companies

Corning Inc. (cont.) Innovative leader in foreign alliances for

over 73 years. First joint-venture was with St. Gobain, a

French Glass maker. Together they produced Pyrex cookware

in Europe during 1920’s Joint- Ventures total to 50 ventures Only 9 were unsuccessful

Corning Product

What Has Corning Inc. Done lately?

Today, Corning is a global leader in five vital market segments: Display Technologies – glass substrates for LCD flat

panel televisions, computer monitors, laptops and other consumer electronics

Environmental Technologies – ceramic substrates and filters for mobile emission control systems

Telecommunications – fiber optics, cable and hardware & equipment for telephone and internet communication networks

 Life Sciences – optical biosensors for drug discovery Specialty Materials – advanced optics and specialty

glass solutions for a number of industries

Vitro Founded in 1909 Located in Monterrey, Mexico One of the worlds largest glass

manufacturer Concentrates on drink-ware Other Diversifications:

Automobile Windshields Washing Machines Beverage Bottles Fragrance Bottles

VITRO Product

Corning-Vitro Shared similar product specializations Shared similarities in history, customer-

orientated philosophies, goals, and objectives

Looking to capitalize on NAFTA by accessing the Mexican market

In 1992, they formed a joint venture This was a first for an American-Mexican

joint venture

Match made in Heaven

Hofstede’s Cultrual Dimensions

AMERICA’S CORNING MEXICO’S VITRO Low power distance

Flatter, decentralized structures

People from the top would let the people on the bottom make decisions and listen

High power distance People blindly obey

orders, very centralized, tall structures

The top makes all decisions and the bottom follows them to the letter

Hofstede’s Cultrual Dimensions

AMERICA’S CORNING MEXICO’S VITRO Low Uncertainty

Avoidance Willing to accept risks

of the unknown Less managerial

structure More managerial risk

taking

High Uncertainty Avoidance High need for security Structure

organizational activities

Less managerial risk taking

Hofstede’s Cultrual Dimensions

AMERICA’S CORNING MEXICO’S VITRO High Individual

Wealthier Greater individual

initiative Protestant work ethic

High collectivist Poorer Less individual

initiative If there is it has to

come from the top Less support of a

Protestant work ethic In this case, Catholic

Hofstede’s Cultrual Dimensions

AMERICA’S CORNING MEXICO’S VITRO Masculine

Stress earning, wealth, recognition, advancement

On the lookout for the next opportunity for promotion or raise

More easily achieved in Low Power distance nations and movement is easier

Feminine Cooperation, friendly

atmosphere, employment security

Makes it easier for loyalty for a company to exist

This dimension that encourages Vitro to be more formal and polite

Culture Clash in Management

CORNING VITRO Decentralized

Middle- and lower- level managers involved in decision making

Depending on the type of decision, such as distribution or consumer, chief executive would never know about it.

Centralized Top managers make all

important decisions Middle-level managers

were seldom asked to contribute

Mr. Loose comments “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.”

Culture Clash in Management

CORNING VITRO Informal

Forward Moved quickly Open to acknowledge

problems in hopes to try to fix

Formal Family oriented Very polite Believed to have

moved slowly Bureaucratic and

hierarchal Unwillingness to

acknowledge problems Thought it was rude

Culture Clash in Management

CORNING VITRO Competition

Encourage competition between their people

Quick-action and aggressive sales stemmed from this aspect

Always attempting to be better at selling, at producing, at anything else that would help the business thrive

Cooperation Encourage cooperation

amongst people Slower, deliberate

approach to sales It was in a closed

economy in Mexico with little competition

Main focus was on product reliability

Culture Clash in Management

CORNING VITRO Individual rewards

Encourage competition and used to enhance the competition perspective discussed earlier

Encourage people to come up with new ideas, to earn more sales, to produce better, etc.

Group rewards Encourage cooperation

amongst people Necessary to make

products reliable

Culture Clash in Management

CORNING VITRO Risk

More open to risk Have to change in

order to survive and every decision requires an element of risk

Corning wanted to distribute its products to Wal-Mart and K-Mart

Safety Averse to risk Vitro was in a closed

economy in Mexico with little competition

It was out of its element with Corning’s method of doing business

Culture Clash in Management

CORNING VITRO Low Organizational

Loyalty People identify more

with their occupation Not saying that loyalty

for the organization does not exist, but its at a minimum

High Organizational Loyalty Stems from its

bureaucratic and hierarchical structure

Very loyal to family and patrons

Aftermath In 1994, the $130 million venture ended

and the money was returned in full. To this day, Corning still investigates

what it could have done differently. Both Vitro and Corning have changed

their relationship into a distribution of each other’s products.

Encourages companies to get an understanding of culture and management practices before entering into joint ventures

Sources Bardois, Charles C. "Cultural Valuse Cause a Clash." New York Times [New York]

1992, 22nd ed., Business sec. Print. (Corning Inc) http://www.corning.com/products_services/index.aspx Darling, Juanita. "The Great Trade War- U.S, Mexican Glassmakers Partnership

Breaks the Mold." Los Angeles Times [Los Angeles] 18 May 1993. Print. Durr, Clyde B., Sylvie Rousselen, and Frank Bournios. Cross Cultural Approaches to

Leadership Development. 5th ed. N.Y: Penguin, 2001. Print. Luthan, Fred, and Jonathen P. Doh. International Management. 7th ed. New York:

McGraw-Hill International. Print. Schuller, Randell S., Susan E. Jackson, and Yadong Lou. Managing Human

Resources in Cross-Border Alliances. 7th ed. N.Y, 2005. Print. Smith, Dan. State of the World Atlas. 8th ed. New York: Penguin, 2008. Print. (VITRO) http://www.vitro.com/vitro_corporativo/ingles/abus.htm