corning vitro
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CROSS CULTURAL CONFLICTS
THE CORNING-VITRO JOINT VENTURE
Derrick QualsRyan Huelsmann
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
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
Corning Product
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
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
VITRO Product
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
Match made in Heaven
Hofstede’s Cultrual 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
Hofstede’s Cultrual 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
Hofstede’s Cultrual Dimensions
AMERICA’S CORNING MEXICO’S VITRO High Individual
Wealthier Greater individual
initiative Protestant work ethic
High collectivist Poorer Less individual
initiative If there is it has to
come from the top Less support of a
Protestant work ethic In this case, Catholic
Hofstede’s Cultrual Dimensions
AMERICA’S CORNING MEXICO’S VITRO Masculine
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
Feminine 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
Culture Clash in Management
CORNING VITRO Decentralized
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.
Centralized 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.”
Culture Clash in Management
CORNING VITRO Informal
Forward Moved quickly Open to acknowledge
problems in hopes to try to fix
Formal Family oriented Very polite Believed to have
moved slowly Bureaucratic and
hierarchal Unwillingness to
acknowledge problems Thought it was rude
Culture Clash in Management
CORNING VITRO Competition
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
Cooperation 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
Culture Clash in Management
CORNING VITRO 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
Culture Clash in Management
CORNING VITRO Risk
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
Safety 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
Culture Clash in Management
CORNING VITRO Low Organizational
Loyalty People identify more
with their occupation 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
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
Sources Bardois, Charles C. "Cultural Valuse Cause a Clash." New York Times [New York]
1992, 22nd ed., Business sec. Print. (Corning Inc) http://www.corning.com/products_services/index.aspx 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. (VITRO) http://www.vitro.com/vitro_corporativo/ingles/abus.htm
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