Management of culture in an international joint venture between a South African and Japanese company.
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Date
2005
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Abstract
This dissertation focuses on the management of cultural diversity in a joint venture (JV), formed
in 2002, between a South African company, Sasol Chemical Industries and a Japanese company,
Mitsubishi Chemical Cooperation (MCC). The reasons for the formation of the JV as well as
the details are provided.
One of the key threats identified for the JV is the challenges posed by the merging of two
different cultures. Research studies indicate that the longevity of a JV is largely determined by
the management of cross cultural conflicts. Unresolved cultural differences can have a
detrimental effect on the success of the JV. This leads to the formulation of the following
hypothesis "Proper Management of Cultural Diversity will result in the long term success of the
JV between Sasol and MCC".
According to Hofstede (1983), an evaluation of the management of cultural diversity requires an
analysis of the managerial and cultural behaviour of both South African and Japanese culture.
Questionnaires, comprising largely of rating scales, were administered to a population
comprising of the senior, middle and junior management from Sasol that were directly involved
in the JV. The aim of the questionnaire was to evaluate and compare the knowledge Sasol
employees have about South African and Japanese business culture, determine the current level
of cultural sensitivity and to evaluate the level of cross-cultural diversity training received. The
results are then benchmarked and evaluated against those characteristics displayed by JV’s that
adopt a third culture approach.
Based on this information it was determined that the current management of cultural diversity
was not adequate for the long term success of the JV. Differences emanating from managerial
behaviour such as the differences in managerial style, decision making process, organisational
structure and communication styles lead employees to become frustrated and unsure of what to
do. Differences in Cultural behaviour such as the degree of Individualism, Uncertainty
Avoidance and Masculinity also resulted in misunderstanding of intentions that often lead to
distrust and ethnocentric behaviour. These findings correlated when benchmarked against the
ratings of those characteristics displayed by JV's that adopt a third culture (Graen, 1996). The
hypothesis "the current level of management of cultural diversity is sufficient to ensure the long
term success of the JV' was rejected with the final finding being that the current management of
cultural diversity is not sufficient to ensure the long term success of the JV. Comments from
participants indicated that there was indeed no management practice in place to manage cultural
diversity. Most participants felt at a loss when handling diversity issues and were unsure of the
level of sensitivity to display to other cultures.
The key recommendation was the implementation of cultural training programs similar to that
developed by Berrell (1999) and to develop an organisational culture that will assist employees
in reducing behaviour variability.
Description
Thesis (MBA)-University of KwaZulu-Natal, 2005.
Keywords
Diversity in the workplace., Theses--Business administration.