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Corning Vitro

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This presentation reveals why the Corning-Vitro joint venture failed, and what must be examined to prevent such disasters.

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Corning Vitro

  1. 1. Cross Cultural ConflictsThe Corning-Vitro Joint Venture<br />Derrick Quals<br />Ryan Huelsmann<br />
  2. 2. Corning Incorporated<br />Famous for Oven-ready glassware<br />Other diversifications:<br />Fiber Optics<br />Environmental products<br />Laboratory Services<br />Has had previous success in globalization and Joint Ventures with other companies<br />
  3. 3. Corning Inc. (cont.)<br />Innovative leader in foreign alliances for over 73 years. <br />First joint-venture was with St. Gobain, a French Glass maker.<br />Together they produced Pyrex cookware in Europe during 1920’s<br />Joint- Ventures total to 50 ventures<br />Only 9 were unsuccessful<br />
  4. 4. Corning Product<br />
  5. 5. What Has Corning Inc. Done lately?<br />Today, Corning is a global leader in five vital market segments:<br />Display Technologies – glass substrates for LCD flat panel televisions, computer monitors, laptops and other consumer electronics <br />Environmental Technologies – ceramic substrates and filters for mobile emission control systems <br />Telecommunications – fiber optics, cable and hardware & equipment for telephone and internet communication networks <br /> Life Sciences – optical biosensors for drug discovery <br />Specialty Materials – advanced optics and specialty glass solutions for a number of industries <br />
  6. 6. Vitro<br />Founded in 1909<br />Located in Monterrey, Mexico<br />One of the worlds largest glass manufacturer<br />Concentrates on drink-ware<br />Other Diversifications:<br />Automobile Windshields<br />Washing Machines<br />Beverage Bottles<br />Fragrance Bottles<br />
  7. 7. VITRO Product<br />
  8. 8. Corning-Vitro<br />Shared similar product specializations<br />Shared similarities in history, customer- orientated philosophies, goals, and objectives<br />Looking to capitalize on NAFTA by accessing the Mexican market<br />In 1992, they formed a joint venture<br />This was a first for an American-Mexican joint venture<br />
  9. 9. Match made in Heaven<br />
  10. 10. Hofstede’sCultrual Dimensions<br />America’s corning<br />Mexico’s Vitro <br />Low power distance<br />Flatter, decentralized structures<br />People from the top would let the people on the bottom make decisions and listen<br />High power distance<br />People blindly obey orders, very centralized, tall structures<br />The top makes all decisions and the bottom follows them to the letter<br />
  11. 11. Hofstede’sCultrual Dimensions<br />America’s corning<br />Mexico’s Vitro <br />Low Uncertainty Avoidance<br />Willing to accept risks of the unknown<br />Less managerial structure<br />More managerial risk taking<br />High Uncertainty Avoidance<br />High need for security<br />Structure organizational activities<br />Less managerial risk taking<br />
  12. 12. Hofstede’sCultrual Dimensions<br />America’s corning<br />Mexico’s Vitro <br />High Individual<br />Wealthier<br />Greater individual initiative<br />Protestant work ethic<br />High collectivist<br />Poorer<br />Less individual initiative<br />If there is it has to come from the top<br />Less support of a Protestant work ethic<br />In this case, Catholic<br />
  13. 13. Hofstede’sCultrual Dimensions<br />America’s corning<br />Mexico’s Vitro <br />Masculine<br />Stress earning, wealth, recognition, advancement<br />On the lookout for the next opportunity for promotion or raise<br />More easily achieved in Low Power distance nations and movement is easier<br />Feminine<br />Cooperation, friendly atmosphere, employment security<br />Makes it easier for loyalty for a company to exist<br />This dimension that encourages Vitro to be more formal and polite <br />
  14. 14. Culture Clash in Management<br />Corning <br />Vitro<br />Decentralized<br />Middle- and lower- level managers involved in decision making<br />Depending on the type of decision, such as distribution or consumer, chief executive would never know about it.<br />Centralized<br />Top managers make all important decisions <br />Middle-level managers were seldom asked to contribute<br />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.”<br />
  15. 15. Culture Clash in Management<br />Corning <br />Vitro <br />Informal<br />Forward<br />Moved quickly<br />Open to acknowledge problems in hopes to try to fix<br />Formal<br />Family oriented<br />Very polite<br />Believed to have moved slowly<br />Bureaucratic and hierarchal<br />Unwillingness to acknowledge problems<br />Thought it was rude<br />
  16. 16. Culture Clash in Management<br />Corning <br />Vitro<br />Competition<br />Encourage competition between their people<br />Quick-action and aggressive sales stemmed from this aspect <br />Always attempting to be better at selling, at producing, at anything else that would help the business thrive <br />Cooperation<br />Encourage cooperation amongst people<br />Slower, deliberate approach to sales<br />It was in a closed economy in Mexico with little competition <br />Main focus was on product reliability<br />
  17. 17. Culture Clash in Management<br />Corning <br />Vitro<br />Individual rewards<br />Encourage competition and used to enhance the competition perspective discussed earlier<br />Encourage people to come up with new ideas, to earn more sales, to produce better, etc.<br />Group rewards<br />Encourage cooperation amongst people<br />Necessary to make products reliable<br />
  18. 18. Culture Clash in Management<br />Corning <br />Vitro<br />Risk<br />More open to risk<br />Have to change in order to survive and every decision requires an element of risk <br />Corning wanted to distribute its products to Wal-Mart and K-Mart<br />Safety<br />Averse to risk<br />Vitro was in a closed economy in Mexico with little competition<br />It was out of its element with Corning’s method of doing business<br />
  19. 19. Culture Clash in Management<br />corning<br />vitro<br /><ul><li>Low Organizational Loyalty
  20. 20. People identify more with their occupation
  21. 21. Not saying that loyalty for the organization does not exist, but its at a minimum</li></ul>High Organizational Loyalty<br />Stems from its bureaucratic and hierarchical structure<br />Very loyal to family and patrons<br />
  22. 22. Aftermath<br />In 1994, the $130 million venture ended and the money was returned in full.<br />To this day, Corning still investigates what it could have done differently.<br />Both Vitro and Corning have changed their relationship into a distribution of each other’s products.<br />Encourages companies to get an understanding of culture and management practices before entering into joint ventures<br />
  23. 23. Sources<br />Bardois, Charles C. "Cultural Valuse Cause a Clash." New York Times [New York] 1992, 22nd ed., Business sec. Print.<br />(Corning Inc) http://www.corning.com/products_services/index.aspx<br />Darling, Juanita. "The Great Trade War- U.S, Mexican Glassmakers Partnership Breaks the Mold." Los Angeles Times [Los Angeles] 18 May 1993. Print.<br />Durr, Clyde B., Sylvie Rousselen, and Frank Bournios. Cross Cultural Approaches to Leadership Development. 5th ed. N.Y: Penguin, 2001. Print.<br />Luthan, Fred, and Jonathen P. Doh. International Management. 7th ed. New York: McGraw-Hill International. Print.<br />Schuller, Randell S., Susan E. Jackson, and Yadong Lou. Managing Human Resources in Cross-Border Alliances. 7th ed. N.Y, 2005. Print.<br />Smith, Dan. State of the World Atlas. 8th ed. New York: Penguin, 2008. Print.<br />(VITRO) http://www.vitro.com/vitro_corporativo/ingles/abus.htm<br />