I many South American countries it is important to develop a good social

I many south american countries it is important to

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–While in the US people get down to business first, and then get to know each other socially later. In many South American countries, it is important to develop a good social relationship beforetrying to discuss business issues. –In Hindu societies where the pursuit of material well-being can be viewed as making spiritual well- being less likely, worker productivity may be lower than in nations with other religious beliefs. –In countries where workers receive excellent training and are highly literate, the need for specific worker training programs is decreased and the hiring of additional employees is facilitated. Marketing practices
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•Cultural differences affect a JV more (than merger and acquisition) because the two parent firms retain their separate management. •Cultural difference affect three aspects in an IJV –Communication –Decision making –Personnel •To minimise the impact of the cultural difference: –The joint venture should be between partners with similar culture. If not, then the fit between partners needs bridge the cultural difference, e.g. A partner with low tolerance for uncertainty will likely want the other partner to signal its commitment through actions such as increasing its equity stake and transferring new technology to the JV. •To minimise the impact of the cultural difference –Issues related to cultural differences may be mitigated by training expatriate managers adequately before sending them on assignment to a foreign JV. –Manager must have experience of managing in at least one foreign country (Barkema, Bell and Pennings, 1996). A large difference in long-term orientation can be a problem, as emphasis on short- term objectives by one partner may signal a lack of long-term commitment. Here the impetus is similar to agreeing on goals: Each partner has to decide what is most important for it and whether it is willing to allow the other partner to achieve the goals. –Clearly delineating management responsibility and deferring to a set of previously agreed-upon rules if conflict arises. MANAGING CULTURE DIMENSIONS •Avoid large cultural clashes –Look for similar cultures •Bridge cultural distance, e.g. –Improve cross-cultural skills versus ethnocentricity Being conscious of ethnocentric bias •Use opportunities for cross-cultural exposure (travel, learn another language…) •Numerous forms of cross-cultural training available (expatriation, cross-cultural teams, negotiations..) •Increase diversity of management teams –Get local partners to present “local face” (e.g. locals as subsidiary managers, JV partners…)
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Tap on locals’ cultural understanding, know-how, business networks –Build a very strong global company culture But may not overpower national cultural differences (ref. Hofstede’s study) •Harness cultural distance –Deliberate use of cross-cultural teams for innovation/problem-solving HQ- SUBSIDARY RELATIONSHIP WHY IMPORTANT •Subsidiaries manage the interface with local markets. •However, they face two types of pressures: –Internal embeddedness Subsidiaries are part of the MNE network.
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