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.

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

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  • 1. Cross Cultural ConflictsThe Corning-Vitro Joint Venture
    Derrick Quals
    Ryan Huelsmann
  • 2. 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
  • 3. 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
  • 4. Corning Product
  • 5. 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
  • 6. 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
  • 7. VITRO Product
  • 8. 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
  • 9. Match made in Heaven
  • 10. Hofstede’sCultrual 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
  • 11. Hofstede’sCultrual 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
  • 12. Hofstede’sCultrual Dimensions
    America’s corning
    Mexico’s Vitro
    High Individual
    Greater individual initiative
    Protestant work ethic
    High collectivist
    Less individual initiative
    If there is it has to come from the top
    Less support of a Protestant work ethic
    In this case, Catholic
  • 13. Hofstede’sCultrual Dimensions
    America’s corning
    Mexico’s Vitro
    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
    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
  • 14. Culture Clash in Management
    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.
    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.”
  • 15. Culture Clash in Management
    Moved quickly
    Open to acknowledge problems in hopes to try to fix
    Family oriented
    Very polite
    Believed to have moved slowly
    Bureaucratic and hierarchal
    Unwillingness to acknowledge problems
    Thought it was rude
  • 16. Culture Clash in Management
    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
    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
  • 17. Culture Clash in Management
    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
  • 18. Culture Clash in Management
    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
    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
  • 19. Culture Clash in Management
    • Low Organizational Loyalty
    • 20. People identify more with their occupation
    • 21. 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
  • 22. 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
  • 23. Sources
    Bardois, Charles C. "Cultural Valuse Cause a Clash." New York Times [New York] 1992, 22nd ed., Business sec. Print.
    (Corning Inc)
    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.