Making sense of cultural factors in international alliances

Although most companies forming an international alliance perform rigorous analyses of strategic, financial, and legal concerns, many new ventures fail. Cultural incompatibilities are usually the culprit. By looking at such issues as time horizons, reward systems, decision making mechanisms, corrective actions, stated goals and objectives, and hierarchical structures, executives can gain tangible evaluation of how smoothly the 2 cultures will mesh. Managers assigned to operate the alliance should not come from subcultures within the parent companies that are culturally distinct from the subcultures of the staff divisions that negotiated the alliances.