MCCD Course Assignment No-1

1)    Why did Corning- Vitro decide to form a Joint Venture   ?

Ans: Corning enters into joint ventures for two primary reasons which are best
explained through examples of its past ventures. The first is to gain access to
markets that it cannot penetrate quickly enough to obtain a competitive advantage.
Corning currently has multiple ventures that exemplify market penetration.
Samsung–Corning is an alliance in which Corning provided its distinctive
competency of television tube production while Samsung provided expansion
Into the television market. Corning was able to achieve a strong market share in the
Asian market, with sales in excess of $500 million.
The second reason is to bring its technology to market. For example, the strategic
alliance of Corning with Mitsubishi led to the creation of Cometec Inc. Corning
produces the ceramic substrates in automotive catalytic converters. The venture
employs coating technology developed by Mitsubishi that extends Corning’s
business into stationary pollution control. Corning reports that the venture is
Quite successful.

2-      Why did the Joint Venture fail?

Ans: A Strong Mexican peso, increased overseas competition, and Strong cultural
differences spelled trouble for the alliance. The economic problems are
understandable, but the cultural differences should have been given more attention
before the alliance was entered into. Although both companies appeared so similar
on the surface, they really were quite different. Cultural clashes erupted from the
very beginning of the venture because of differing approaches to work. One
example was in the marketing area. Vitro’s sales approach was less aggressive than
the Americans at Corning thought necessary; the slower, deliberate approach to
sales in Mexico was a result of the previously highly controlled Mexican economy.
Corning’s more quick-action oriented and aggressive sales approached developed
from decades of competition.

3-      If you were CEO of Corning USA, what steps would you take to ensure success of the
JV?

Ans: If I were CEO of corning USA then steps taken by me are following:-
Discuss the problems and learn from them, not hesitant to criticize anyone,
especially a visible U.S. partner like Corning.
The Mexicans preferred to concentrate on continuation of the marketing
arrangement between the companies.
Openly spoke of the alliance as one that stopped making sense.
Cross-cultural differences inhibited the potential of the alliance.
Openly acknowledged the different decision-making styles between the two
cultures.
Expresses their views so frankly in public. “It is unfortunate that he made those
Comments,” said an anonymous Vitro executive. The president of Vitro, Eduardo
Martens, flatly denied that the cultural differences were any greater than in other
alliances.
Business in Mexico is done on a consensus basis, very genteel and sometimes
Slow by U.S. standards.”
Corning feels they learned a lesson in the failed Vitro alliance; both foreign and
domestic alliances require additional skills and more management time.
Alliances carry a lot of risk and misunderstandings, but they can be significantly
beneficial to the operations of a company if they are done carefully and selectively.
Corning continues to analyze why the cultural differences withVitro were too
strong to overcome.

MCCD Course Assignment No-2

1-What challenges do mergers create for managing national and organizational
cultures?
Ans: Herb Aspbury and other international managers faced challenges on another
level of complexity. It was necessary not only to get former rivals to work together
but also to deal with centuries-old cultural differences that could become major
impediments to the business going forward. Whether the issue was the disdain
that the proud Spanish team had for their colleagues in the U.K. Or class
distinctions remaining just below the surface in many countries, such issues had to
be addressed quickly if the new Chemical Bank was to have a cohesive
Business throughout the region. Managing a business from New York with offices
in Atlanta, Chicago, and Los Angeles was far different from managing a business
from a place where the distances were shorter but the differences in Language and
history were more intense. Despite efforts by the European Union to create a
unified market, most country managers at Chemical Bank and other major
Multinationals tended to focus inwardly and not think beyond their borders.
Fortunately the prospect of working for a successful new company helped
managers overcome many of the obstacles in Europe. Focusing on common
denominators rather than on differences was also important. Communication
Was a key element in this regard, and bimonthly meetings in London of the
country managers became the norm. The meetings proved to be very effective for
building Personal relationships of mutual respect, thus overriding generations of
cultural barriers. Another important factor was the reward system, which included
a very generous bonus pool.

2. How might the challenges associated with post-merger integration in Europe be

affected by the fact that the parents of each company in both mergers were based
In the United States?
Ans: On the international side, the challenge is especially complex.
The interaction of organizational culture and national culture can create
impediments to change and constrain managerial options. At the same time, a
merger can reenergize organizations, break down barriers to change, and provide
new opportunities. Balancing the interests of a range of stakeholders, dealing with
people in an honest and straightforward fashion, and working with individuals to
address some of the inevitable disruptions all go a long way toward increasing the
likelihood of success in mergers involving different national and organizational
cultures.
3. What management skills are most important to making a cross-border merger
successful? How might these skills differ from those needed during “routine
“periods?
Ans: The management skills of are most important to making a cross-border
merger successful. Not only must the business fit be there from the start (the so-
called synergy), but the price has to be very realistic and the due diligence
exacting. Unfortunately it’s estimated that fewer than a third of all deals
are successful in the end, as measured by financial results, market capitalization,
and key management retention. Indeed, some mergers are “dead on arrival.” All of
the synergies in the world, however, can be destroyed by poor execution by various
levels of management. Failing to take into account corporate cultural differences,
to recognize the strengths and weaknesses of the various businesses and
People, and to understand local cultures can be fatal. On the international side, the
challenge is especially complex. The interaction of organizational culture and
national culture can create impediments to change and constrain managerial
options. At the same time, a merger can reenergize organizations, break down
barriers to change, and provide new opportunities. Balancing the interests of a
Range of stakeholders, dealing with people in an honest and straightforward
fashion, and working with individuals to address some of the inevitable disruptions
all go a long way toward increasing the likelihood of success in mergers
Involving different national and organizational cultures.

4. What specific steps were taken in the two mergers to try to align the interests of
different parts of the organizations so that they were all working toward the overall
good of the firm?
Ans: specific steps were taken in the two mergers to try to align the interests of
different parts of the organizations are following-
Several months before the merger was announced, Herb Aspbury was named
Group Executive for Europe for Manufacturers
With the merger he became Senior Managing Director for the new bank, and the
dynamics of his job changed dramatically.
Although he was sent to Europe to “rationalize” the bank’s presence in the region
(i.e., cut costs), the merger became a positive event for shareholders and
employees alike. There wasn’t a great deal of overlap in Europe between the
former competitors; instead, what Aspbury found was a complementary fit among
the various businesses.
The former Chemical Bank had concentrated its activities on its powerful foreign
exchange and interest rate swaps businesses from its London dealing room;
A few skeptics questioned how the joining of two troubled banks might create a
successful new bank, but from the start most media and securities analysts were
positive about the combination. Their enthusiasm was based not only on the
inherent logic of the deal from a cost standpoint, but also on the way in which
management decisions were being made and communicated. and the challenges
that senior managers faced were abundant. In addition to keeping clients happy and
revenue flowing, they had to build their new teams in a way that kept the best
people from leaving, and they had to foster the idea that the new organization
wasn’t merely the sum of the parts. The organization would be a brand-new bank
that everyone hoped would bear little resemblance to the troubled past.

5. How might diversity among employees of different cultural backgrounds and

with varying specialties and expertise actually strengthen an organization’s culture
after a merger?
 Ans: Diversity among employees of different cultural backgrounds and with
varying specialties and expertise actually strengthen an organization’s culture after
a merge by all measures the Chemical/Manufacturers Hanover. Merger was an
enormous success around the world. Within six months of the completion of the
deal, the new company was earning more in one month than its predecessors had
earned in one quarter on a combined basis. The stock price rose from the high
teens to the mid-fifties in two years, and the rating agencies upgraded the bank’s
long-term debt, thus reducing the cost of capital. Clients were also very happy, as
evidenced by the new business Chemical was receiving at the expense of its
competitors. Indeed, by late1995, the company was in a position to acquire Chase
Manhattan Corporation, a once proud bank struggling with problem loans and
misguided expansion into overseas retail banking. Accordingly, after a summer of
rumors, on August 28, 1995, Chase Manhattan and Chemical Bank announced
plans to merge. Unlike the 1991 merger of equals, this was a takeover of Chase by
Chemical, but because of the prominence of the Chase name around the world,
Chemical Banking Corp. changed its name to Chase. Manhattan Corp.

Submitted To, Submitted By

Prof.Vikram Tyagi Subodh Kant

JKPS/PGDM/09/48