A Brazilian - Swedish Relationship : How to Establish a Successful International Joint Venture

University essay from Högskolan i Halmstad/Sektionen för ekonomi och teknik (SET); Högskolan i Halmstad/Sektionen för ekonomi och teknik (SET)


Due to the nature of globalization, new strategies have been designed to break into new markets. Joint Venture is a common strategy to enter new markets and by using a Joint Venture, companies share risks and establish new contacts with local knowledge. Brazil is a market where foreign investors gain more and more interest. Brazil's economy is growing fast and made well during the global financial crisis. The middle class in Brazil is constantly growing and for the first time, poverty is not a majority in Brazil.In an International Joint Venture (IJV), it is usually a foreign company establishing a partnership with a local company. Often, IJVs fail because companies have problems collaborating, depending on different variables. In this thesis, we chose to analyze the cultural barriers in a Brazilian-Swedish IJV on the Brazilian market. The purpose of this thesis is to gain an understanding and describe cultural barriers in an IJV partnership, and high-light those to increase the chances for successful IJVs between Brazilian and Swedish companies in the future.This thesis is qualitative, with an abductive approach, in order to gain a deeper and better understanding of experienced barriers. We have chosen to see culture from both a national and an organizational perspective as earlier research has showed that national culture affects the organizational culture within an IJV. Using Hofstede's (1991) four dimensions of national culture as a supplement to Wilson’s (2001) four factors influencing the organizational culture, we have conducted four interviews in two Swedish-Brazilian IJV companies located in São Paulo, Brazil. The companies we have chosen to interview have been small or medium-sized manufacturing. Interviews were conducted face-to-face in a comfortable environment for all respondents. In our analysis, we used matrices to make it easier to see what differences and/or similarities there are between the case-companies.Results of this study, demonstrate that the experiences from the two case-studies are well in line with each other. The organizational structure in Brazil has been perceived as more hierarchical than the Swedish vertical and more open structure. This in turn, has strengthened the differences in communication between managers and employees, which been perceived as more top-down in Brazil than in Sweden. Our conclusion is that cultural barriers have been perceived, in the perception of the leaders’ expected behavior, language barriers, differences in planning and management of uncertain situations, Brazil's more family-oriented society and close relationship between private life and work in the Brazilian market.Several of these barriers have been experienced during the early start-up of an IJV, something we believe increases the importance of being well prepared for cultural barriers that may arise. The importance of an agreement upon the structure and policies at the company at an early stage is crucial, to reduce future possible conflicts. Show mutual respect and understanding for one's partners’ culture and experienced cultural barriers, use these to avoid any negative effects, and instead create a positive impact for the IJV.

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