Management of culture in an international joint venture between a South African and Japanese company.
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.