Reasons for Failure of Joint Venture---Case of Tcl & Alcatel Joint Venture

2389 Words Sep 15th, 2010 10 Pages
Table of Contents:

1.1_Executive Summary 2

2.1_Introduction 3

2.2_Main Body 4-8 2.2.1_Case outline 4 2.2.2_Culture differences 5-6 2.2.3_Poor leadership 6-7 2.2.4_Insufficient planning 7-8

2.3_Conclusion 8

2.4_Recommendations 9

3.1_Reference list 10

4.1_Appendix 11

Executive summary:

In the contemporary society, many multinational enterprises would like to use joint venture as their favorite entry mode due to its unique advantages, such as: directly access to the local partner’s knowledge, sharing development costs and risks. Meanwhile, it is important to figure out the factors that will cause failure of joint venture. Generally, 3 major factors: culture difference, poor
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Partners’ national cultural differences in an international joint venture enlarge these partner’s organizational cultural differences and their employees’ professional cultural differences (Sirmon and Lane, 2004). Cultural differences have direct influences on international joint venture performance through organizational learning and management practice (Pothukuchi et al, 2002). On the one hand, national culture differences can negatively influence management practice and organizational learning (Meschi & Roger, 1994). On the other hand, in some cases, national culture differences may have helpful influences on management practice. But no research suggests that national culture differences have helpful influences on organizational learning. Organizational culture differences are harmfully related to management practice and organizational learning (Sirmon and Lane, 2004). In terms of case of TCL and Alcatel (T&A), those 2 enterprises have huge difference in culture and system, especially the culture difference. For example, Alcatel emphasizes human-based management, employees can enjoy relatively loose working environment, but TCL prefers more strict management style, this results in the employees from Alcatel cannot adapt the working environment of new

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