A model for managing cultural diversity in international joint ventures : the SASOL case
Reyneke, Jan Harm Thomas
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Businesses in the 21st Century face a wide array of complex opportunities, including expanding into global markets, developing internal and external innovative products and practices in order to remain competitive, and attracting and retaining the most talented workforce possible. Furthermore, as a result of the maturation of several trends of the 1980s - intensified foreign competition, shortened product cycles, soaring capital investment costs, and the ever-growing demand for new technologies - strategic alliances are becoming an attractive strategy for the future. The number of domestic and international alliances has grown by more than 25 percent annually since 1990. Although these strategic alliances can take on a number of forms, International Joint Ventures are one of the most often used forms of strategic alliances. However, globalisation means, that organisations are increasingly being forced to deal with people who come from different cultures. Therefore, how effectively organisations perform, depends in part on how effectively they can work across cultural divides. Although organisation cross international boundaries and surmount trade baniers seemingly easily, cultural boundaries are not so easily bridged. On a practical level, culture translates into perceptions, needs, thought patterns and conduct. The cognitive map of culture, however, holds no practical solutions. In order to manage a particular phenomenon, one first needs to understand the nature of it, and what influence it may have on the organisation. Once the phenomenon is understood, management practices can be designed and developed in order to effectively manage it. The literature review focuses on what culture is, how it can be grouped into dimensions, the influence it has on management, and, based on the latest literature, formulate a model for managing cultural diversity in International Joint Ventures. Sasol, a multinational patrol-chemical company with business activities in six continents, and being the third-largest company in South Africa, offers the ideal platform to measure management practices, with regards to management of cultural diversity in International Joint Ventures of a prominent South African company, with off-shore interests, against the model. The empirical study was done by sending out a research questionnaire to thirteen senior managers of Sasol, all with an international human resource and/or expatriate management and/or international joint venture management portfolio. The primary objective of the questionnaire is to test the suggested model for managing cultural diversity in International Joint Ventures against current Sasol management practices, and indeed regarding the management of cultural diversity in International Joint Ventures. The research findings clearly indicate that although Sasol complies with certain management practices as proposed by the model, Sasol does not comply with the overwhelming majority of management practices of the model. The study also makes specific recommendations that will assist Sasol to achieve a greater level of compliance with the model.