Corning-Vitro Joint Venture Analysis

CORNING-VITRO JOINT VENTURE ANALYSIS

The case of Corning-Vitro shows some of the difficulties with forming a joint venture with a foreign corporation. Even though it seemed that the venture would be an instant success, cultural differences led to its eventual demise. On the surface the two companies seemed to be compatible, but were unable to adapt a uniform corporate culture. Many problems arose because of the differing managing styles of upper management in the United States and Mexico. By forming this joint venture each company hoped to gain access to markets that it couldn’t penetrate quickly enough to create a competitive advantage. The companies also wanted to share their technology with other firms to gain access to markets that they couldn’t easily enter.

Many cultural differences led to the end of the joint-venture. First of all, the companies had differing ideas about how products should be marketed and sold. Corning thought that Vitro was too slow with their sales and production. The Americans accused the Mexicans not being aggressive enough and wasting too much time by being polite. On the other side, Vitro thought the Americans were too forward and that they moved too quickly. There were major differences in the way the two company’s management was organized and in the way they made decisions. Corning could not deal with the timeliness and hierarchy of Vitro’s decision making process, implying it took too much time and was inefficient. The Americans felt that the decision making process used by the Mexicans was inefficient and was detrimental to the company.

In addition to the differing managing styles, problems arose due to financial and commercial concerns between the two companies. A strong Mexican peso and increased overseas competition caused economic concern for Corning. The joint venture between Vitro and Corning had differences in administrative practices, management structures, and accounting style. Due to the different needs of customers in the United States and Mexico, sales and distribution methods posed a problem. Experts were not able to forecast the difficulty of managing from two different countries.

Corning has a long history of successful joint ventures. Vitro and Corning had all the qualifications to make a successful joint-venture. However, there did not seem to be much effort on the executive’s