Cross-Cultural clashes :
A Road to Disaster
Study of The Corning-Vitro Joint Venture

BACKGROUND OF VITRO
 100 yr. old Mexican Glass
manufacturing company
 Global orientation
 History of successful joint ventures
 $3.5 billion in sales and 40,000
employees

Background of Vitro
 Primarily into Drinkwares including
dozens of other products like
windshield to washing m/c

BACKGROUND OF CORNING
 150 yr. old American Glass manufacturing
company.Famous for oven ready glass ware
 Diversified into fiber optics , Environmental
Products , Laboratory services etc
 Corning was historically successful in
international joint ventures (Ex- St.
Gobain,Samusung,mitsubishi etc)
 Only 9 out of 50 JVs dissolved over a 73 yr.
period
 Sales from jvs to the tune of $3b in last 5 years
and profit $500m.

Vitro & Corning JV
 Vitro, S.A. and Corning Inc. signed
$800 million joint venture in Fall 1992
 Each parent company
 took equity stake in newly created firms
 agreed to marketing, sales and
distribution relationships to support
each other.
 After 25 months JV was dissolved.

REASONS FOR JV -CORNING
 Gain access to the markets that it cannot
penetrate quickly to have competitive
advantage .
 To bring its technologies to the market

REASONS FOR JV - VITRO
 Penetrate into emerging North American
Market after NAFTA
 To avoid losing identities to the giants like
Corning.

JV- AN ECONOMICALLY
INTEGRATED UNIT
 Similarity of History,Goal and Objective
 Corning specialized in cookware and Vitro in
tableware.
 Corning was accomplished at melting glass, while
Vitro was expert in molding it.
 The companies intended to combine product lines
based on where each company had technical
leadership, and they began to swap technology to
enhance their respective capabilities.


Cont…..
 In marketing, Corning-Vitro intended to add Vitro’s
products to the existing Corning line. This would allow
Corning to expand sales of its tableware glass to Mexico
and throughout Latin America through the Vitro-Corning
marketing group.
 By combining their technical know-how, the two firms
would be in a better position to deal with competitors in
the combined North and South American markets
 Where production lines or marketing efforts overlapped,
they planned to rationalize operations and adjust
facilities and capabilities accordingly.

Marriage made in Hell
 Cultural and other conflicts undermine the vision shared
by the companies at the beginning of the joint-venture
 Different approaches to work
 Complications with relatively strong peso.
 Increased overseas competition
 Different administrative and accounting practices
 Different Mexican/U.S. consumer demands
 Corporate control: Family-business styled Mexican firms
were reluctant to share control
 Cornice –Vitro-$700M and Vitro-Cornice $200m

Values in Culture
U.S. culture
How the Americans
see the Mexicans:
Collectivism,
High power distance,
High uncertainty
avoidance
Femininity
Particularism
Ascription
Synchronous (Flexible)
Diffuse
High Context
Implicit
High Non-Task Time
How the Mexicans
see the Americans:
Mexican culture
Individualism
Low power
distance
Low uncertainty
avoidance
Masculinity
Universalism
Achievement
Sequential
Specific
Low Context
Explicit
Low Non- Task
Time

POWER DISTANCE
Extent to which less powerful members of
institutions and organizations accept that
power is distributed unequally
Vitro was bureaucratic & hierachical.
Centralised organisation.
Cornings was flat & decentralised.

MASCULANITY VS FEMININITY
Masculinity: a culture in which the dominant social values
are success, money and things
Femininity: a culture in which the dominate social values
are caring for others and the quality of life
Vitro employees are loyal to family & the
organisation.Members are not empowered to
take decision.Sales approach less
aggressive,slow & delibarate.
Cornings employees are quick,action oriented &
aggressive .Highly competitive

INDIVIDUALISM VS
COLLECTIVISM
Individualism: Tendency of people to look after themselves
and their immediate family only
Collectivism: Tendency of people to belong to groups or
collectives and to look after each other in exchange for
loyalty
Vitro employees believe in group decision making
and individual decisions are rarely
communicated to the top management.
Cornings employees look after themselves and
take individual decisions .

UNCERTAINTY AVOIDANCE
Extent to which people feel threatened by
ambiguous situations and have created beliefs
and institutions that try to avoid such situations
 VITRO employees were risk averse ,docile
and dependent on the decisions of the Sr.
management/Experts
 CORNING employees aggressive, risk
taking and ambitious .

SPECIFIC VS DIFFUSE
 Specific culture: individuals have a large public space
shared with others and a small private space they guard
closely and share only with close friends and associates
 Diffuse culture: public and private space are similar in
size, individuals guard public space carefully because it is
shared with private space
 American have high public space and small private
space.Strong separation of work & private life.
 Mexican have similar public & private space. They guard
their public space as it allows one into their private
space also.
Ex- Open acceptance by CORNING about the cultural
differences.

UNIVERALISM VS
PARTICULARISM
 Universalism: belief that ideas and practices can be
applied everywhere in the world without modification
 Particularism: belief that circumstances dictate how
ideas and practices should be applied and something
cannot be done the same everywhere
 Vitro being an Mexican firm is high on particularism
where employees believe in relationships and trust
whereas Corning being an American firm where
employees believe formal rules and regulations and
concepts like “deal is a deal “ and to be fullfilled

ACHIEVEMENT VS ASCRIPTION
 Achievement culture: status is accorded
based on how well people perform their
functions
 Ascription culture: status is based on who
or what a person is
 CORNING believes in success and
achievement .
 Vitro believes in giving more importance
to age , rank and social connection.

TIME MANAGEMENT
 CORNING believes in sequential approach
and fast & time bound completion of the
tasks.
 Where as Vitro philosophy was
synchronous in approach and slow .

TAKE AWAY
 Similarities in history,philosophy,goal and
objective does not guarantee a successful
JV.
 One of the most important dimension of a
successful JV is also TRUST.
 Additional skill w.r.t understanding cultural
dimensions and more time to spend by
management to inculcate an accepted
compatible culture

THANK YOU.
ANY QUESTION ?????