Groupcase Nora-Sakari: a Proposed Joint Venture in Malaysia
Because every problem almost always has more than one solution, the question of whether or not a joint venture between Sakari and Nora would be the best option for either of the companies is difficult to assess. However, there are certain benefits, which are mentioned in the case, that clearly outline the initial motivation for forming the join venture. From the Sakari side, the motivation came in the form of a new market in Southeast Asia, while Nora was motivated by Sakari’s telecom technology and the possibility of acquiring it and/or replicating it in the future. The forming of the joint venture would benefit both companies if the terms of the agreement were favorable for both parties. It is also noted in the case that Sakari had another option of expanding its operations into the European (EU) market (primarily the United Kingdom), which in turn split the corporation into two “camps” – one for the joint venture with Nora and one against it. While Sakari had a second strategy to pursue, Nora already placed a competitive bid for the TMB project and was in dire need of a partner to fulfill its contract.
With the stage set, we now turn to analyzing the negotiations that Sakari and Nora held and why these two companies could not find common ground to form a joint venture. With the help of Hofstede’s Value Dimensions and the information provided by the case we see that there are a number of issues that hindered the two companies for reaching a mutual agreement. When applying the value dimensions model to compare Finland’s values to those of Malaysia, we notice that they differ significantly (by almost 50%) in each dimension. Refer to the diagram: the darker shaded regions represent Malaysia, while the lighter regions represent Finland. In the power distance dimension, Malaysia scores three times higher than Finland, showing that in general the Malaysian culture promotes a very hierarchical society with a large degree of separation between upper management
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With the stage set, we now turn to analyzing the negotiations that Sakari and Nora held and why these two companies could not find common ground to form a joint venture. With the help of Hofstede’s Value Dimensions and the information provided by the case we see that there are a number of issues that hindered the two companies for reaching a mutual agreement. When applying the value dimensions model to compare Finland’s values to those of Malaysia, we notice that they differ significantly (by almost 50%) in each dimension. Refer to the diagram: the darker shaded regions represent Malaysia, while the lighter regions represent Finland. In the power distance dimension, Malaysia scores three times higher than Finland, showing that in general the Malaysian culture promotes a very hierarchical society with a large degree of separation between upper management
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