Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Corning Vitro

6,648 views

Published on

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

  • Be the first to comment

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 />

×