Intercultural Management in Business: A Case Study on Cross-Cultural Problems in Joint Ventures

This report discusses the importance of intercultural management in joint ventures through a case study on cross-cultural problems between a US sport equipment manufacturer and a Japanese company. It explores various theories and frameworks to understand intercultural behavior and provides recommendations for effective intercultural management.

Intercultural
Management In
Business

EXECUTIVE SUMMARY
The report is based on a case study about a joint venture of a US sport equipment
manufacturer and a Japanese company. It has been discussed that Japanese company as well as
US sport equipment manufacturers want to enter into a joint venture because of the enormous
interest of Japanese people in the game of golf. Moreover, it has been identified that three
representatives from each of the firms from US and Japan met in San Francisco to establish a
joint venture. The joint venture never did take place because of the inability of both the parties to
understand inter cultural requirements. The report has discussed the cross-cultural problems that
have led to the failure of joint ventures with the help of various theories. Finally, it has advised
about various theories and frameworks that can be helpful in understanding intercultural
management and behaviour.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
American Representative Failed Due to the Problem of Intercultural differences................1
Problems found in Cross-cultural management of joint venture mergers..............................2
Multicultural Theories to understand the difference between the cultural behaviours of the
people across US and Japan...................................................................................................2
Understanding Intercultural awareness by American Representatives for understanding
intercultural problems.............................................................................................................3
Comparison and contrast of the distinct features of different management behaviours across
two cultures with the help of Hofstede’s Six Dimensions of Culture....................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
It is very important that the people who are entering into joint ventures from various
locations must understand the culture and the practices of people from different places.
Intercultural Management can be explained as the management of people from various
diverse/similar backgrounds, traditions, religion, societies, Nations, beliefs etc., their existence
with each other by mutual understanding and respect. The case-study has discussed the joint
venture for the US sport equipment manufacturer and the Japanese company that has failed due
to the inability of the representatives to understand intercultural requirements. In a brief manner,
intercultural management can be explained as the mutual understanding and respect of each
other's cultures within an international context. Intercultural management is very important for a
business in order to acknowledge the cultural differences and manage them effectively, instead
of ignoring them so that better work conditions can be maintained at the workplace. The report
will describe various inter-cultural requirements for these international organisations. It will also
discuss various problems that have led to the failure of establishing a joint venture. In the end, it
will discuss various differences in the management behaviours across the cultures of the USA
and Japan.
MAIN BODY
American Representative Failed Due to the Problem of Intercultural differences
The American representative failed to understand the intercultural differences that led to
the failure of the joint venture. The main cause of the failure was the problem of intercultural
communication that is described as the ability of people from different cultures to interact with
each other by mutually understanding and respecting each other's cultures, behaviours, traditions,
values, etc. The representatives of the US sports equipment manufacturer have not recognised
behaviour and culture of people in Japan, as well as the representatives of Japanese company do
not recognise behaviours and cultures in the US that lead to the lack of understanding about the
behaviours of people from both the countries. The representatives from Japanese companies and
US sports equipment manufacturers were not aware of how to behave in front of each other. The
representatives met in San Francisco where the American representatives showed inadequate
behaviour by taking off their jackets, rolling up their sleeves and talking in a manner that is seen
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to be very blue chip and monastic in Japan. These were the main problems or issues that the
American representatives have not considered which affected the conversation negatively.
Problems found in Cross-cultural management of joint venture mergers
Intercultural management is a broad term, on a macro level cultural aspects are very
diversified and certain methods, models or frameworks for learning and exploring these
traditions, norms, backgrounds and values in the international arena are needed. Intercultural
management has become a global standard for the international operations of an organisation and
has led a long way from exception to compulsion (Huang, 2020). The main problems found in
intercultural management of joint ventures and mergers are given below:
 Inappropriate behaviour and communication by the representatives
 Individualism and collectivism was entirely different among the representatives
 Lack of Cultural convergence
 Trust and understanding among the representatives was not developed
 Misunderstanding of the cultural causes that is due to the assumption and perceptions of
representatives from both cultures went wrong
 Low level of experience with the people from different cultures
Multicultural Theories to understand the difference between the cultural behaviours of the people
across US and Japan
The concept of multiculturalism is described as the people within the multicultural aspect
exist peacefully and express and share their own views, beliefs, traditions, norms, cultures etc.
without hampering the other cultures, societies or traditions (Yang, Cheung and Li, 2022). With
the help of multiculturalism theory that describes the two theories models that are "melting pot"
and "salad bowl".
The melting pot theory assumes that various groups tend to melt together and leave their
individual cultures for getting assimilated in a given society. The people across US are more
familiar to this form of intercultural adaptability.
The salad ball theory is based on a moral liberal theory of multiculturalism that describes society
as a heterogeneous group of people that exist together with certain unique characteristics of
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their traditions and cultures. The people across Japan are more familiar to this form of
intercultural adaptability.
Understanding Intercultural awareness by American Representatives for understanding
intercultural problems
Intercultural awareness is helpful in providing conceptual paradigms about various inter-
cultural aspects across the international market which is very important to improve intercultural
mix. The understanding of diversified backgrounds, norms, practices, traditions, demography,
restrictions, values, location, etc. can help American representatives to understand cultures using
various frameworks and theories.
 Cultural convergence theory: This theory states that when the two cultures come
together with similar ideas, beliefs, thoughts, traditions etc. the people are more likely to
work together and co-operate with each other with close social systems. It will lead to
convergence overtime that will provide a greater level of cultural uniformity for better
performance of people at the workplace.
 Intercultural competence framework: This framework explains that an individual
requires a certain attitude and minimum level of effectiveness and appropriate behaviour
and communication skills, for becoming good at intercultural interactions. By developing
certain attitudes such as flexibility, empathy and adaptability the representatives can
interact appropriately and effectively with the people from different cultures.
 Inter-cultural adaptation framework: This is based on the idea that people who live in
different cultures for an extended period of time, start to develop the ideas, values, rules
of those cultures among themselves. This is helpful in enhancing the community
engagement activities as well as inters cultural mix by using the "accepted models of
experience".
 Individualism and collectivism: Individualism refers to the independence in the goal
setting and decision making activities of an individual without any considerations for
other's welfare, opinions, beliefs etc. even those who belong to the same community.
Collectivism explains that the groups are the primary unit and measure determinants of
the community and society actions (Legué, 2022). With the help of collectivism the
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interpersonal relations whether inside or outside the cultures can be determined and
understood for enhancing the behaviours of representatives.
 Co-cultural theory: This theory explains the interconnectivity of people from different
backgrounds and characteristics in the global arena (Bolten, 2020). The co-cultural
framework provides an explanation about the perception of people from different
backgrounds and cultures towards each other.
 Communication accommodation theory: The main purpose of theory is to decrease or
increase the communicative distances among the people from different cultures and
backgrounds (Anikina, 2020). This theory seeks to predict and explain why, when and
how the communicative behaviour of people tends to change during social interaction and
its consequences for improving the adjustments.
 Culture, self and communication model: The connectivity among the 'cultural
components, individuals and interpersonal relationships' is described through this
framework about the culture and communication among the people. It also explains that
the connection of culture can be done by developing collectivism and individualism
among the people and their communication activities.
 Face negotiation theory: This theory helpful in avoiding the misunderstanding of the
cultural causes that is due to the assumption and perceptions of people that went wrong,
which is managed by avoiding, compromising or obligate with the situation.
 Cultural Fusion theory: This theory explains about the ways in which a person from
different cultures can acculturate into the new cultures that may be dominant at that place.
This is helpful in developing intercultural identity among the people and their precise
identity as well as the identity of the host cultures.
 Standpoint theory: This theory is based on the facts, knowledge, experience and
behaviour of people that is shaped in the large part of social groups where they belong
(Bhawuk, 2021). The people in the same society have almost similar perceptions to
different things and their views have a common linkage and connection that shapes their
views and perceptions.
 Stranger theory: This theory explains the strangers as the 'hyper-aware' people who tend
to put their perceptions over another cultural identity and try to influence the behaviour of
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people in a different society while avoiding or eliminating their differences and personal
space.
Comparison and contrast of the distinct features of different management behaviours across two
cultures with the help of Hofstede’s Six Dimensions of Culture
Hofstede's six dimensions of culture is an internationally recognised standard that provides
the identification and understanding of various cultural differences across given scenario. With
the help of Hofstede cultural dimensions the distinguishing characteristics of different cultures of
US and Japan can be understood. The detailed explanation of Hofstede’s dimensions of culture is
given below.
Figure 1: Hofstede's Model of US and Japan
 Power distance index: PDI is explained as the percentage of inequality or the degree of
inequality that prevails that is supported between people within and without power. The
higher power distance index (50) in Japan indicates the acceptance of inequality and
hierarchy distribution of power within the society and the people are aware about their
place in that hierarchy. The lower power distance index score refers to the equitable
distribution of power among the people within the society and people who try to work
together (Lückmann, 2020). In comparison to the power distance of the US that is (40)
low creates different situations for American representatives to act with the people of
Japan.
 Individualism vs collectivism: The high individualism score (91) in the US indicates
that the interpersonal connections among the people within the society are weak and
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people take less responsibility for the actions and outcomes of others. In the collective
society of Japan, the people have mutual collaboration and support for each other's
performance, take responsibility and provide chances for improvement by mutual efforts.
 Masculinity versus femininity: It refers to the distribution of roles between men and
women. In feminine societies like the US, overlapping roles between male and female is
modest and people try to work with each other by minimising the gap between the men
and women. In the highly masculine society of Japan the roles of men and women are
less likely to overlap and men comparatively have assertive behaviour (Isotalus and
Kakkuri-Knuuttila, 2018). The masculinity is high in Japan as compared to the low level
of masculinity in Japan that affects the management behaviours across these countries.
 Uncertainty avoidance: The societies in Japan have high levels of uncertainty avoidance
(89) try to have maximum control and prediction of the situations, risks and their lives.
They try to control their lives in the best possible manner for attaining any objective or
goals by preparing plans and drawing upon their consequences. The Hofstede model
claims the uncertainty avoidance of Japan with a score of 89 and the uncertainty
avoidance of the US at low (46) shows the difference between the risk taking abilities of
people within these countries and it affects the overall operations of management within
these countries.
 Long versus short term orientation: This is also known as pragmatic versus normative
orientation that refers to the time horizon people in a given society. The countries like
Japan with a long term orientation are pragmatic, more work focused and modest. The
countries with short term orientation like US have people who tend to create more
emphasis over the principles, consistency and truth and are relatively more religious and
nationalistic. The japan has short term orientation (29) and the UK has long term
orientation (77) that provides different methods of working of management activities
within these countries.
 Indulgence versus restraint: The countries like US that have higher IVR encourage free
gratification of peoples on desires and emotions and people are freer to accomplish their
wishes. The societies like Japan that have low IVR scores emphasize on suppressing
gratification and have more regulations on the conduct of behaviour of people and have
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stripped social norms. The US has high IVR on the other hand Japan have low IVR that
differentiates the management activities across these nations.
CONCLUSION
The report has been describing the inter-cultural problems that affect the joint ventures and
amalgamations. Intercultural management and adaptability has been discussed that is very
important for a business to acknowledge the cultural differences and when effectively to improve
the work conditions, communication and coordination among the people from different cultures.
Moreover, it has been describing or certain theories, models and frameworks such as intercultural
competence framework, cultural convergence theory, inter cultural adaptation framework, co-
cultural theory, cultures, self and communication model etc. Furthermore, it has provided the
explanation of Hofstede's 6 dimensions of culture and multicultural theory for enhancing and
understanding and acceptance of the cultural differences.
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REFERENCES
Books and Journals
Anikina, Y. A., 2020. THE IMPACT AND STRATEGY OF MODERN CORPORATE
CULTURE CONFLICTS ON INTERCULTURAL MANAGEMENT. In Актуальные
проблемы авиации и космонавтики (pp. 438-440).
Bhawuk, D.P., 2021. Intercultural Dialogues: Some Theory-guided Practical Tips for Managers.
In Intercultural Management in Practice. Emerald Publishing Limited.
Bolten, J., 2020. Intercultural business communication: An interactive approach. In Exploring
the rhetoric of international professional communication (pp. 139-155). Routledge.
Huang, J., 2020. Intercultural Management as a Powerful Business Tool. In Sino-German
Intercultural Management (pp. 9-26). Springer, Cham.
Isotalus, E. and Kakkuri-Knuuttila, M.L., 2018. Ethics and intercultural communication in
diversity management. Equality, Diversity and Inclusion: An International Journal.
Legué, B., 2022. When Value and Moral Are Problematic Concepts: Using VaKE in an
Intercultural Management Context. In The VaKE Handbook (pp. 236-242). Brill.
Lückmann, P., 2020. Introduction to Intercultural Project Customer Engagement. In Engagement
of Intercultural Project Customers (pp. 1-5). Springer, Cham.
Yang, H., Cheung, C. and Li, W., 2022. Intercultural communication competency practices in the
hotel industry. Journal of China Tourism Research, 18(1), pp.162-184.
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