Cultural Difficulties of Joint Venture in China

Cultural Difficulties of Joint Venture in ChinaThe benefits in Joint Venture JV gives more(prenominal) resources, greater capacity and increased proficient expertise. It acts as a representative for marking the accompanys entrance to a new market when still it is at its encyclopaedism stage. The mutual trusted partnership and co-operation give terzetto to its success. It strengthens the long term relationships or it whitethorn as well as collaborate on short term projects which manoeuvre them to access a new market and access to new technologies and they fucking also learn how to tackle the cultural difficulties if they be successful.The risks in say run a risk partnering with a nonher company in an entirely new market is a bit risky. It takes more time and effort to build the right relationship.the problems will in all probability arise if the objectives of the JV atomic number 18 not clearly menti 1d and explained or communicated. Normally the companies dumbfound t heir own objectives which will be distinguishable than the JV objectives. Imbalance in levels of expertise, assets and investments will lead to a poor integration and co-operation. Different ending and management styles will also lead to poor performance and co-operation.If both the companies doesnt exit necessary leadership support in early and developing stage of the JV it will also lead to disaster like dissolution.Cultural difficulties may occur for a global company in JV follows belowUnderstanding the cultural environments is critical to the success of the organisation or a company. husbandry is important and it makes difference in the management. Variable glossiness and different management styles will lead to dissolution of the venture.Cultural differences always influence the way of devising decision and solving problems.this also may lead to disaster. Unmanageable complexity, loss of autonomy, informationuncertainty and long term orientation will lead to mishap of th e venture.Human resource management plays a vital role in the Joint venture. Poor human resourcemanagement will lead to supreme failure of the venture.The companies on their own have different structural style but in a joint venture there is adifferent style. It has been learnt in early days the Chinese use so called shame technique.The Chinese do not regard people as raise until they ar at least 40yrs old.Most of the Chinese companies are part owned by the GOVT so the employment decisionsmaking are done or influenced by govt burucracies and this will also consume more timeso this may also lead to impatience of global company.Within the advertising industry in China, advertisements have also not been spared fromcontroversy and national debate. With a strong influence of multi-ethnic Chinese cultureand history, companies are constantly challenged to convey their messages to capabilityconsumers effectively, accurately, and yet not appear offensive. While the Chineseembraces globa lization, they are not a least hesitant from voicing their dissatisfactionwhen the contents of advertisements threaten their strong Chinese values.Western extradite managers in JVs could be extraordinary. This could make anexpatriate assignment to JV in China and it will be a very spoil experience.Presumably, cross-cultural facts of life may be particularly helpful for the adjustment of westerners encountering the forbid work environment in JV. In comparison, theadjustment of Western expatriate executives in other types of organisations may not befacilitated as much by cross-cultural training.Senior managers in China have good technical training, but it is not common for Chinesemanagers to have formal management training. Besides, they may have littleinternational experience or understanding of a free-market economy. Such differencesmay create substantial problems for expatriate managers in China. Disparity in educationand background may result in lower relationship on an inter personal level. Differences in ageand experience may lead to further complications. A negative circle can easily take hold,creating a considerable amount of stress. Unaware of the finer nuances of the localcultural and social context, Western expatriates may quickly attribute their inevitablebusiness difficulties to the ineptness of their Chinese JV partners. This attribution couldbe reinforced when they are reminded that they have been invited to China to improve onthe business deficiencies of their Chinese counterparts. To the Chinese, the word bundle means unaccompanied when a commercial organization, not a legally binding document. Signinga contract is a formal confirmation that they intend to do business with you, not anindication of how they are planning to conduct business. It is well known that realnegotiation in China begins solo after the contract is signed. every problems arisingthere from are due to the fact that the officials in the negotiation do by have limitedau thority and also tend to interpret the provision of the contract from their own cultural,political and economic viewpoint. Also, the government frequently changes thelaws hence, parties to the contract try to keep the arrangements as open and flexible aspossible.Recommendations to enable a joint venture China is booming market which hasmore than 1.3 billion of consumers and it has retained a considerable attraction forinternational business. Initially, the Joint Venture law from 1979 only allowed foreigncompanies to invest in joint ventures (JVs), but from 1987 onwards they could also formwholly foreign-owned enterprises. Although the number of wholly foreign-ownedenterprises are increasing at a faster rate. So if a global company wants to market theirproducts in the Chinese market pyramid then the outperform option to attain their end is tomake a JV and reach their goal in china while still in the developing process. Chinais distinctly different from al some other countries and would be a challenging destinationfor Western business expatriates. Their need for effective cross-cultural skills appears tobe substantial, as they have to adjust to a fundamentally different cultural and socialcontext than their own. That adjustment may be facilitated by means of cross-culturaltraining, there is inconclusive evidence of its authority the impact of such trainingmay be contingent on circumstances at the host location. Hence, the challenges set about Western expatriate managers in JV could be extraordinary. This could make anexpatriate assignment to a very frustrating experience. Presumably, cross-culturaltraining may be particularly helpful for the adjustment of westerners encountering thefrustrating work environment in JV. In comparison, the adjustment of Western expatriateexecutives in other types of organisations may not be facilitated as much by cross-cultural training. In organisational settings totally dominated by the foreign parent,Western expatriates may encounter a less frustrating internal work environment.It is best that the global and foreign company both should seek due representation in thetop management group. They both should offer enough leadership to add a betterdeveloping process.Human resource management plays a vital role in joint venture before starting theprocess for the joint venture they should go for look see process in which they analysethe lynchpin factors like how they are going to train and employ staffs from china with thehelp of the JV company, by studying the cultural advantages and disadvantages and whatare the resources they will be needed from the parent company and from the foreigncompany. Next the key travail should be picking the right person for the right job and theyshould also keep in mind that in china they consider the person is mature when at leastthey are 40 yrs old others will be considered as kids, so they should keep the age in mindwhen they are appointing key persons in the company.Langua ge training may vary from brief survival talking to instruction to extensive,immersion training, aiming for complete spoken and written fluency. Host languageability may serve several purposes. Besides facilitating discourse with locals, itmay also demonstrate an attitude of attempting to learn about the host culture, enablingone to be polite, and permitting cultural understanding not otherwise possible.They three key dimensions of in-country adjustment(1) adjustment to work(2) adjustment to interacting with host nationals and(3) adjustment to the general non-work environment.For a successful company it should establish a good relation with the partner company to learn the cross culture and what are the key tasks they should concentrate to conduct the required knowledge for implementing the process to form a greater JV company.They should provide training for the people in the organisation to understand basic tenets of Chinese values, norms, and behaviours through cross-cultural training may facilitate the daily work routines of the Western expatriates increasing their work adjustment. In a Joint venture both the companies should learn their foreign languages in order to improve the communication and parting information which will lead them to success in the joint venture.Both companies should share their resources, technology and analyse the aims and objectives of the company to succeed in the JV. merchandise is one of the major tasks in the joint venture company are any company.Marketing Marketing, among all business functions, is nearly down-to-earth in terms of dealing with customers. As ordinary customers, every one of us already knows about merchandise. after all, it is all around us. Many people may be under the impressionthat marketing is only selling and advertising, but it is actually only the beg of themarketing iceberg. There exists a massive network of people and activities, competingfor customers attention and purchases. In todays marketpl ace, marketing must beunderstood in the new sentiency of satisfying customer needs. They define marketing asthe process by which companies create value for customers and build strong customerrelationships in order to obtain value from customers in return.The company has to understand the marketplace and customer needs and wants. Therefore, the company needs to research its customers and the market place in order to stash and manage marketing information and customer data. The second step, designing a customer driven marketing strategy, takes place once the market place and customers are fully understood. The company will select which customers to serve through marketsegmentation and targeting. A value proposition will also be trenchant throughdifferentiation and positioning. After deciding on its overall marketing strategy, in thethird step, the company is ready to construct a marketing programme, whichtransforms abridgment strategies into real value for customers. The programm e is alsoknown as the marketing mix which consists of 4 elements (the 4Ps)-product, price,place and furtherance. The fourth step, which is actually throughout the wholemarketing process, is to build profitable relationships and create customer delight. Toachieve the goal, the company must establish strong relationships with marketingpartners as well. The fifth step is when the company can finally reap the fruits of its strong customer relationships by capturing value from customers in return. Once thecompany has created satisfied and loyal customers, it can capture customer life-timevalue with a result of increased share of market and customer. The marketing mix starts with product strategy. Product covers more than the physical goods the company wants to sell. It is the goods-and-service combination the company offers to the target market.The company has to be aware of the advertisements which they produce this may also incur some problems because within the advertising industry in China, advertisements have also not been spared from controversy and national debate. With a strong influence of multi-ethnic Chinese culture and history, companies are constantly challenged to convey their messages to potential consumers effectively, accurately, and yet not appear offensive. While the Chinese embraces globalization, they are not a least hesitant from voicing their dissatisfaction when the contents of advertisements threaten their strong Chinese values.Chinese culture at the level of national culture, which is best embodied in the values held by its people. A value system is seen as a relatively ineradicable perceptual framework that influences an individuals behaviour. Chinese cultural value system is so unique that itdistinguishes Chinese culture from Western cultures and the other Eastern cultures. Chinese culture is composed of traditional culture, communist ideology. The key to understand the traditional Chinese culture is Confucianism. Having competed with the other schools of thought in history, such as Taoism, Buddhism, etc., Confucianism is undisputedly the most influential thought, which forms the foundation of the Chinese cultural tradition and still provides the basis for the norms of Chinese interpersonal behaviourIf the HR department and the operations department are clear with the Chinese culture and able to differentiate between them then it will reduce the risk variable culture organisation.The first key and regularity to market a product is to adopt cultural approach in marketing.Culture penetrates our inner being subconsciously and at a deep level. human culturesshare many common features. it is highly risky to ignore the potential influences generated by distinctive Chinese culture on marketing outcomes. It can lead to embarrassing mistakes, or more importantly, little rewards after all the efforts on marketing.Strategic management has to be global, whereas marketing management largely needs to be tailored to local co ntexts therefore, an intercultural orientation to marketing best serves a global strategic view.Product is the central element in the market offering. localization in China is to appeal to Chinese customers taste.The production department should always keep in mind that brand new designs for a single market may be very effective in terms of delivering customer value for a specific market. Whereas, it cannot be applied to a wide range because the be shoot up.Price is a significant element of communication and a decisive element in the social interaction between buyer and seller. It endorses their agreement and shapes their relationship, immediately and in the long term. For customers, price is a means of evaluating products in terms of social representations strongly akin to culture.The major priority lies in capturing the most customer value at the lowest cost, which is achieved by sourcing locally. cultures influence on pricing seems a little weak.Pricing is a big problem facing m any marketing executives. The rest of the marketing mix must be taken into account while marketers decide how to price.The choice of place or dissemination is one of the two elements of the marketing mix, which are essential in pushing the product towards the customer. Due to that reason the distribution forms subtle relationships with consumers by means of unmediated contact, it also plays a role as a cultural filter.Companys promotion mix also called its marketing communication. Mix consists of the specific blend of advertising, sales promotion, in the public eye(predicate) relations, personal selling and direct-marketing tools. The company uses the set of tools to persuasively communicate customer value and build customer relationships. Ideally if the company carefully coordinate these promotion elements to deliver a clear, consistent, and compelling message about the organization and its products then it can capture the market.And there are situation like you can only appoint Chinese officials only for certain market strategy and product developing, if the necessary steps had been taken by both of the companies then the JV will lead to great success.And there are necessities to have a relation ship in Chinese govt bureaucracies to have better understanding and learning of laws. multinational companies or global company face more complicated marketing environments when dealing with customers cultivated in different cultures in the times of globalization. The JV helps in these situations so it is best to become a JV and focus on the market after studying the cultural differences thoroughly. There exist other concerns unconnected from culture, such as the local marketing environment, the companys long-term strategic plan. The marketing should be culture conscientious, they should perform locally as well as be customer value oriented, holding a global view.The key to success in joint venture isthe global company and the foreign company should have mutual u nderstanding and trust on each other.In organizational communication, people are mainly to take out him self through language to express ideas, concepts and facts. Language is the foundation of effective communicationSo it is best to keep a common language to communicate between the people.To improve cross-cultural communication skills as an effective measure is to develop cross-cultural training programs. These training programs should focus on training efficiency and effectiveness, avoid engaging in forms of training objectives and training should be based on object-choice training content, training content selection based training methods. These methods will help the organisation to run in smoother way.It is true that global companies cannot impose their ways of doing business on China. On the other hand, China actually wants and needs overseas firms to introduce more modern practices as a way of whipping domestic businesses into shape. So there will be success for the joint ven ture firms if they focus in the right direction at the right time. They should always analyse their aims and objectives it will lead them to success.Even though they are from different cultural backgrounds they should exceed in visualising their goal by communicating each other and passing through to even the lowest grade staffs. This reduces misunderstanding and their performance improvement can be seen.Due to the globalisation even the Chinese also try to keep up with the current trends in the market to survive so this will also help in a matter of fact for the joint venture company.