Cultural Differences and Homogeneity in Strategic Alliances: The Case of Trimo Trebnje (Slovenia) and Trimo VSK (Russia)

Abstract

Strategic alliances are a necessity for organizations to be successful: to survive in the dynamic surroundings of today, organizations need to give integrated and fl exible solutions to consumers that can better be realized by cooperating with partners (Hagedoorn and Duysters, 2002). The label ‘strategic alliance’ has been used to denote a variety of interfirm relationships: from loose cooperation of independent partners, across joint ventures, acquisitions, towards mergers as the tightest form (Osborn and Hagedoorn, 1997). Despite abundance of their forms, strategic alliances often fail (Duysters et al, 1999; Kauser and Shaw, 2004). Cultural misfit has been recognized as one of the main reasons for such results (Duysters and Heimericks, 2004). Culture can be studied at various levels: national, professional and organizational (Hofstede, 1980, 1990; Ulijn and Weggeman, 2001). This chapter addresses the importance of cultural fit at the organizational level in the case of a Slovenian company from the construction industry and its Russian greenfi eld investment Trimo VSK (Russia), which has been established as a joint venture with Russian partners. Trimo Trebnje d.d. (Slovenia, hereafter Trimo) holds a 51 per cent stake in Trimo VSK and its Russian partners hold 49 per cent. Trimo was aware that in order to operate well within the Russian market, it was necessary to have a local, reputable partner, with particular knowledge of local conditions and market customs. Both companies are presented in more detail in the next section. Just as each individual has its own personal characteristics, so each company has its characteristics that are encompassed in its organizational culture. If a company wants to be successful in the long run, its organizational culture should not be dependent only on its current management but has to develop a strong culture that is based on values that become implicit and are accepted by all of the company’s members (Tekavcic and Peljhan, 2004). On the other hand, employees in the company have to retain flexibility to be able to respond and adapt quickly to sudden changes in the environment as well as in the organization itself. While cultural misfi t is one of the main obstacles for success of a strategic alliance, culture that fits the company’s strategy can be an important source of its competitive advantage (Skerlavaj et al., 2007). Trimo (Slovenia) builds its strategy on internationalization. For this sort of strategy to be successful, it is important that the company knows the culture of the foreign (in our case Russian) market it is entering. A case study by Bartlett et al. (2004) shows that the national culture of whichever country a company does business in has an effect on that company’s organizational culture. It is the culture that is often blamed for marketing blunders, merger failures and unsuccessful transfers of best practices (Johansson, 2004). In Russia, Trimo would like to develop an organizational culture that will be based on the same values, standards and beliefs as the culture in Trimo Trebnje (Slovenia) and thus creates a uniform organizational culture. Trimo is, however, aware that organizational cultures in both companies will not be identical due to differences in national cultures. The purpose of our study was to study comprehensively the organizational culture in the case of Trimo d.d. (Trebnje, Slovenia) and Trimo VSK (Kovrov, Russia). We were primarily interested in: (1) the prevalent profile of the organizational culture in the company; (2) the strength of the company’s culture; (3) the homogeneity of the culture in the company; and (4) the cultural fit within individual departments in the companies and within the analysed companies. In our analyses we established how much organizational cultures in Trimo Trebnje (Slovenia) and Trimo VSK (Russia) differ between each other and what the desired organizational cultures of both companies are. We further studied what could hinder the transfer of Trimo (Slovenia) values and practices to Trimo VSK (Russia), which practices and values should be transferred at all for the culture to support the strategy as much as possible, and which tools should be used to make the transfer of Trimo (Slovenia) culture to Trimo VSK (Russia) smooth and fast.