Cultural Values Differences within IJV settings

While mixed results are present from studies on the cross cultural impact on

IJV performances, most indicate that cultural differences, unless managed well, can

be detrimental to IJV performance in the long run (Barkema et al, 1996).

In a meta study of data and studies published on IJV managerial issues,

Beamish and Lupton (2009) presented key areas in which IJV conflicts surface. They

found out those cultural difference values such as uncertainty avoidance and long-

term orientation affect partner compatibility and in fact are detrimental to IJV

survival. The levels of information sharing, technology transfer and adopting other

partner’s proposed managerial measures may be resisted by partner representative

who are high on uncertainty avoidance. The need for adhering to rules and regulations

and demanding stringent agreements are behaviours which high uncertainty avoiding

culture members would bring to the IJV (Beamish & Lupton, 2009).

Implications of high power distance and low power distance among the IJV

partnering cultures may lead to difficulties in managing the workforce, unacceptable

leadership styles and alienating the staff, etc. The level of hierarchy in the

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differences in the power distance dimension (Hofstede, 2007). Bjerke & Al-Meer

(1993) found that in countries such as Saudi Arabia where high power distance is

fuelled by authoritarian Islamic social systems, the managers and those in power

desired to keep their relationships with their subordinates distant. The demand and

expectations of loyalty and obedience from the subordinates were also highly

pronounced in such cultures (Hofstede, 2007).

According to Li et al (2001) findings, different levels of individualism

between the multi cultural partners and work force have shown to improve JV

profitability and productivity. The level of individualism or its opposite, collectivism,

produces an array of organizational and employee behaviours. The impact of this

dimension on organisational commitment vs. professional commitment was studied

by Aron Cohen (2006) in a study of 880 school teachers in 18 schools in Israel with

two unique ethnic groups representing individualistic and collectivist traits. He found

that there is indeed a differentiation in the two group’s commitment orientations

(Cohen, 2006). Those who were from collectivist cultures such as Japan considered

their work place as a part of their in-group and hence were extremely loyal, having

high organisational commitment (Tayeb, 2005). This difference in organisational

commitment between collectivist work forces and the professional or career

commitment of individualistic work forces can create a clash of conflict in IJV

settings. For instance, those who are more committed to furthering their careers may

choose options with short term benefits that may affect the organisation in the long-

run but bring a person into the lime light for an achievement in the short run. Pursuing

risky projects or entering risky markets may prove to be less beneficial for the

organisation but fulfil career aspirations of a senior expatriate manager from an

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Cases such as Enron in the USA represent such individualistic approaches to

furthering one’s own interests, and exploiting agency relationships. In countries such

as Japan with high collectivism, such scandals and misuse of agency relationship are

less common, with a high commitment to furthering organisational interest in places

of personal interest (Trinidis, 1984; Hill, 2003).

The collectivist dimension also affects the learning propensity where highly

collectivist cultures are resistant towards knowledge acquisition from foreigners and

outsiders. This can affect the technology transfer process which is one of the main

objectives of many of the IJVs (Robertson et al, 2001).

Studies by Noer et al (2007) found that individualistic and collectivist cultures

have different behaviours towards outsiders and this affects the method of managerial

coaching and mentoring within organisations. In a comparative study by Noer et al

(2007), a sample of 151 participants (71 U.S and 80 Saudi managers) took part in a 3-

day coaching workshop which identified that there are distinct differences in coaching

and mentoring styles of the two cultural groups . Their study found that the Saudi

managers use more supportive coaching styles than the US sample. This, along with

more nurturing and relationship-based approaches to mentoring, is in line with the

Saudi culture’s feminine orientation which Hofstede found in his studies (Hofstede,

1997). Such knowledge has critical implications for IJVs with culturally distant

partners as their managerial coaching styles will differ and affect the level of learning

within the organisation. When Saudi and US managers are intent on establishing

productive coaching and interpersonal relationships, having an understanding of the

appropriate methods for different cultures is important. According to Noer (2007), “

U.S. managers attempting to engage in authentic coaching relationships with their Saudi colleagues, understanding the need to ground their efforts in personal

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relationships and collective, rather than individual outcomes can facilitate more productive coaching” (Noer, 2007, p 284).

The work value of masculinity/femininity affects the level of compromise,

collaboration and nurturing within the organisational setting. A study by Lieshout &

Steurenthaler (2006) found that Swedish employees, who are from a culture that

scores high in femininity, act much more collaboratively and compromisingly than

other counterparts from Holland or Germany within a cross cultural environment. The

study also revealed that they are more used to working in groups and collaborating in

problem solving.

In certain instances, the cross cultural work values influence various

organisational aspects and behaviours in combination. For example, uncertainty

avoidance, long-term/short-term orientation, individualism and power distance will all

affect cognitive styles of managers or workforce collectively (Hunt et al, 1989;

Kahneman et al, 1982; Kumar & Andersen, 2000). The collective influence of a

number of dimensions will also result in differences in decision making styles,

adherence to procedures and the level of participation allowed and expected from the

workforce (Trompernars, 2002; Hofstede, 2007; Ali & Schaupp, 1992; Gill &

Krieger, 2000). The amount of information sought in the decision process is

influenced by the level of uncertainty avoidance. Some choose to ignore this or pay

scant attention to this area while highly uncertainty avoiding cultures place great

importance on the information-gathering phase of the decision process. Other cultures

also display various differences in decision making due differences in risk taking vs.

risk aversion (Szabo, 2006). The differences in power distance and masculinity may

affect the level of collaboration, the participation of employees, and consultation vs.

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As high power distance cultures are more structured, and as seniority is

respected, and rarely confronted, there tends to be fewer suggestions and

contributions from lower-rung employees. Szabo’s study (2006) on five European

countries indicated that German work culture perceives participation “is an integral

part of managerial decision making, used as a highly effective tool to achieve sound decisions and ensure employee motivation” (Szabo, 2006). In the case of Swedish culture, the study focused upon consensus orientation and communication styles

where managers seek consultation with “everyone who may be able to provide valid

input”, including subordinates, colleagues, the manager’s own superior and specialists inside and outside the organization (Hofstede, 2001). In Finnish culture, the managers

emphasize the integration aspect where employee autonomy and empowerment are

key priorities, allowing employees to participate and make key decisions. Considering

a study by Lee Ross (2005) on the comparative level of participation by Australian

and Mauritian hotel workers in the decision-making process, it was highlighted that

Mauritian local workers who are from a high power distance culture are “less able to

deal with autonomy and empowerment than their western counterpart” (Lee Ross, 2005, p 256).