Reference no: EM133322048

Case Study: David Smith and his supervisor, Valerie Jones, work for Alpha Products. A relatively small U.S. company, Alpha wishes to expand into the Latin American market and has identified a firm in Venezuela with which it hopes to establish a partnership. Initial discussions between the head of the U.S. firm and the head of the Venezuelan firm have proceeded very smoothly, and Valerie and David have been sent to Caracas, Venezuela, to finalize the few remaining details of the partnership agreement and get the contract signed.

Both Valerie and David are recent college graduates, considered to be smart and savvy by their firm, although neither has traveled abroad before except on brief vacations. Although Valerie speaks only English, David had two years of Spanish in college and is confident that they will have no communication difficulties. Because negotiations have gone so well to this point, they expect it will be a quick trip.

However, after Valerie and David arrive in Caracas, things do not go as expected. They had hoped to get the contract discussions taken care of the first morning so they could enjoy some time sightseeing. Instead, the morning meeting was very leisurely, and the hosts seemed more interested in talking about personal matters than in getting the partnership finalized. Although Valerie and David already knew that the host company was a family business, they discovered during the morning that all of the employees are brothers and (male) cousins; there are no women and no non-family members.

David became self-conscious when he saw that his Venezuelan hosts were very formally dressed in dark suits and ties; he and Valerie had dressed more casually because of the extreme heat. Meanwhile, Valerie felt uncomfortable because the hosts seemed to be ignoring her in the partnership discussions and speaking only to David-even though she was his boss. They were charming to her, and overtly flirtatious, but they weren't taking her seriously as a colleague. David could sense Valerie's discomfort from her body language. She kept moving away from the host's unsolicited touching and gestures. Both Valerie and David were physically uncomfortable with how close the hosts were sitting to them, and especially the closeness of their faces when they talked.

The morning meeting continued through a long, leisurely lunch. David wondered, "When are we ever going to get our contract signed?" When he and Valerie began to try to drop some not-too-subtle hints to the senior Venezuelan about the contract, they were told that everything was a group decision, that the family must carefully consider all aspects before signing the contract. They learned that the Venezuelans expected the Americans to simply leave the documents to be read and signed later. However, before they left the U.S., their boss had told them to come back with the signed documents in hand. When David acted anxious, his host told him to just relax and enjoy the moment-the future would work itself out.

By early afternoon, David was tired, restless, and a little angry. He could tell Valerie was having a lot of trouble dealing with the situation as well. Finally, the lunch came to an end (with the contract still unresolved), and their hosts presented David and Valerie with several small gifts. Valerie felt awkward, because they had not thought to bring gifts to give in return.

Upon leaving the restaurant, instead of returning to the office to continue discussions about the partnership, their Venezuelan hosts left for the rest of the afternoon. Before everyone went their separate ways, the conversation turned to dinner, and the hosts invited the Americans to meet at 9 p.m. After a few hours of sightseeing, David and Valerie went to the meeting point, expecting another restaurant, but found instead a stand-up bar. The hosts did not arrive until 9:45. By this point, David was starving, but when he suggested they find a restaurant, the group fell silent. They finally had a light dinner at 11:30 p.m. David was not happy. He and Valerie were tired and frustrated.

After David and Valerie returned to the U.S. (leaving the still unsigned contract with the Venezuelans), the American company did not hear from the Venezuelan company for several weeks. When the head of Alpha contacted the head of the Venezuelan company, the latter indicated that they had decided not to form a partnership with Alpha Products after all.

You represent an intercultural consulting firm brought in to assess this situation and make recommendations to Alpha Products about how they can be more effective in future international situations. Analyze and explain the tension and conflict in this situation from an intercultural perspective, considering the various categories of cultural differences that we have discussed. Then, develop a list of recommendations for this company, considering the following questions (you do not necessarily need to answer each question; the questions are intended to serve as starting points for formulating your analysis and recommendations):

• What went wrong? Where do the problems lie? Who should take responsibility?

• What cultural differences between American and Venezuelan culture are reflected in this scenario?

• How could the situation have been handled differently? What preparations might the American team have made ahead of time? What should they have expected and been prepared for?

• How could this company best prepare itself for a future partnership with a Latin American company?