Alliances are defined as partnerships where two or more firms work in harmony to attain goals that are equally beneficial. Thus, as two or more industries strive to achieve these aims, they may share risks, information, capabilities, and resources. The primary reason why companies enter into strategic alliances is to gain the advantage of innovation of the other company without investing in new development and research. The essay seeks to locate to firms that have formed an alliance, discuss how the distinct cultural attitudes of the two companies could affect the operation of the alliances, and also discuss the problems that are likely to emerge due to cultural differences.
Examples of two Enterprises that have formed an Alliance
Nissan Motor Corporation and Renault Company are examples of businesses that have formed an alliance. Nissan is a corporation that is based in Japan whereas Renault is located in France. The two companies form formed an alliance in March 1999. During that period, the automotive industry was faced by rapid consolidation.
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How the Distinct Cultural Attitudes of Each Company’s Host Country Could Influence How the Alliance Operates
When managing and forming global strategic alliances, host countries determine the operation of the alliances. Different countries such as Japan and France have distinct cultures. Research that was carried by Sirmon and Lane (2004), indicated that cultural differences between two firms might affect the alliance. Sirmon and Lane (2004), noted how cultural discrepancies between the two countries are durable and reliable. According to Hofstede (1991), cultural differences explained the differences between attitudes, values, and beliefs of managers from different countries. Thus, the cultural differences between the culture of Japan and France challenge the development of successful relationships which may lead to the failure of the alliance.
The cultural variances between France and Japan may negatively affect the alliances by decreasing cooperation between the two countries. National culture is an important aspect for the success of alliances. Since the two nations do not have the same culture cultural interactions are usually reduced which negatively affect the alliances. When the partners have the different c cultures, learning, satisfaction, and the effectiveness of the alliances is decreased. Additionally, according to Sirmon and Lane (2004), when satisfaction, learning and the effectiveness of these interactions are reduced, all the business processes that are used to leverage and combine resources are usually inhibited. Sirmon and Lane (2004) further explained how it is often challenging for partners with distinct national culture to work effectively to attain primary-value creating activities
Problems That Might Emerge for the Alliance as a Result of Cultural Differences
According to Hofstede, partners are seen as loading bodies as far a strategic partnership is concerned. According to him, the cultural differences have a direct impact on the performance of the partnerships (Hongbin, 2009). Thus, one of the problems that might emerge for the alliance as a result of the cultural differences between France and Japan is reduced performance. Reduced communication brings the reduced performance and reduced trust that affects the willingness of future cooperation of the alliances.
In conclusion, international organizations have distinct and varied cultures. As explained above, the cultural differences between France and Japan affect the strategic alliance of Nissan Motor Corporation and Renault Company by challenging successful relationships that occur between the two countries which may eventually lead to failure of the alliance. Furthermore, cooperation between the two nations is also reduced hence lessening the success of the alliances. Learning, interactions, and satisfaction of these alliances are also reduced which further inhibit the business processes used to leverage and combine resources. The biggest problem that arises for the alliance as a consequence of these cultural differences is reduced performance of the alliances.
References
Hofstede, G. (1991) Cultures, Organizations: Software of the Mind, London: McGraw-Hill
Hongbin, D. U. A. N. (2009). Impact of cultural difference and communication on strategic alliance performance. In Proceedings of Marketing Science Innovations and Economic Development of 2009 Summit International Marketing Science and Management Technology Conference.
Sirmon, David G., and Peter J. Lane. "A model of cultural differences and international alliance performance." Journal of International Business Studies 35.4 (2004): 306-319.
