Cultural Awareness In Joint Venture Management

The 20th century witnessed and the 21st goes on witnessing an increasing interdependence of the world economy. Nowadays, multinationals and joint ventures are sweeping across the world. Attracted by its vast market, more and more foreign capital is expected to flow into China. On the other hand, an ever-growing number of Chinese enterprises are bound to go international. China is now the second largest country in exploiting foreign investment. By the end of 1998, there are approximately 324,667 Sino-foreign joint ventures in China. With the China's entry into WTO, joint ventures will undoubtedly play a more and more significant role in China's economy. A joint venture is ex facie a fusion of capital, technology, commodities, labor and management of two partners. In terms of connotation, however, it is the clash, conflict, fusion and assimilation of various cultures. Because of the existence of cultural diversity and cultural differences, the theories, mechanisms and methods of management vary greatly from country to country. Consequently, cultural problems inevitably arise in joint ventures. Therefore, as far as joint venture management is concerned, cultural awareness is of vital importance.Keeping all these in mind, I have chosen "Cultural Awareness in Joint Venture Management" as the topic of my thesis. The purpose of this paper is to point out the cultural problems present in joint venture management and try to find solutions to them.This paper consists of five parts: Part â… clarifies the concept, characteristics, motives and goals, and basic types of joint ventures. Part â…¡ specially deals with culture and cultural differences. First, it introduces the definition, nature and components of culture. Then, it explains cultural diversity and cultural differences. These are followed by the role of culture in international management. Part â…¢ elaborates on cultural factors in joint venture management. To begin with, it gives a brief introduction of the many facets of culture in joint ventures. Right after that comes a research project which helps to find out cultural problems present in joint venture management. Part â…£ provides a systematical approach to solving the cultural problems. First, it demonstrates a series of models of comparing cultures, including: Kluckhohn-Strodtbeck model of cultural orientation, Hall's notion of cultural context, Laurent's concepts of cultures, status, and function andTrompenaars' applications for the consultant. Second, it expounds how to identify different cultures in joint venture management. Also, it covers diverse patterns of reactions to culture clashes. At last, strategies for building joint venture cultures are disserted. Part â…¤ focuses on the Chinese cultural system. It describes the characteristics of Chinese culture and explains why it works the way it is now in the hope of providing some practical suggestions for Sino-foreign joint venture managers.In this thesis, basic concepts, theories, as well as case analysis and research project are exploited. The leitmotif is to provide some practical suggestions for joint venture managers.