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Joint Venture 1 Cross-cultural Management Strategies for Joint Ventures Student ID number Programme of study Module Date Question 3 Word count

Joint Venture 2 Cross-cultural Management Strategies for Joint Ventures Introduction Rio Tinto PLC wants to create a joint venture with Aton Resources Inc. to advance exploration in the Arabian Nubian Shield in Egypt. The joint venture will maximize the resources of both companies in the long run. It will combine their expertise in the mining sector, their background in business, and their skillset in the years of exploration to advance their activities in the final frontiers for gold mining worldwide (Mackey and Sitte, 2023). The merging of these two companies will see increased utilization of robotics, machine learning, location awareness, and other cutting-edge technologies to enable the businesses to automate numerous procedures and transition from partially autonomous to entirely autonomous operations in the Hamama and Abu Marawat deposits (Rodolaki, Barakos and Hitch, 2023). The prospective challenges to this joint venture are numerous. Deficits in the physical infrastructure have been a significant obstacle in negotiating or carrying out joint venture agreements (Ali et al., 2021). The location's inadequate power and road networks may hinder the growth of mining operations. The joint venture's success depends critically on the presence of entrepreneurial and managerial expertise in relevant fields. Despite their strong share involvement and tendency to retain managerial decision-making authority, their inexperience can severely affect a joint venture. Finally, ethnic values occasionally differ when individuals from different cultures work together. We are prone to misinterpreting one another and responding in ways that sabotage otherwise promising collaborations. We must frequently realize how culture influences us (Collinson, 2020). A hurdle to success may arise from stark contrasts in the corporate cultures of the participants. This paper will identify and discuss in detail the cross-cultural management challenges that might arise between management and employees in both companies. The study will reflect on Hofstede’s cultural dimensions to provide insight into various cultural challenges that a joint venture might bring as Rio Tinto embarks on entering the Egyptian mineral market. Company Details Rio Tinto is a London based company that majoring in mining (Mackey and Sitte, 2023). After BHP, Rio Tinto Group is the second-biggest mining and metals firm globally, with dual Australian and British citizenship. It was established in 1873 when a group of investors purchased the Spanish government's mine on the Rio Tinto in Huelva, Spain (Mackey and Sitte,

Joint Venture 3 2023). It has expanded as a result of numerous mergers and acquisitions. While its main concentration is mineral extraction, it also engages in considerable refining operations, especially with regard to bauxite and iron ore. Aton Resources is the oldest exploration firm with a sole focus on Egypt. The company is on the Arabian Nubian Shield (El-Wardany and Jiao, 2023). Abu Marawat Concession has a potential district size of 447.7 square kilometers. It also includes the newly found Rodruin exploration project and the deposits of Hamama and Abu Marawat. The company’s recent activities involve initial resource projections of the area. They are drilling the top prospects, such as the Abu Gaharish potential modeled after Sukari. They are acquiring an exploitation lease in another region and engaging in active dialogue with possible strategic partners to further the company's goals. Cross-cultural Management Challenges Today's managers face a dilemma as firms become more globalized and internal and external teams become more heterogeneous (Ali et al., 2021). Leaders must be aware of cross- cultural challenges to encourage corporate ventures and mergers and ensure their organizations stay competitive and efficient. If left unresolved, cross-cultural management challenges can cause severe damage to the joint venture (Collinson, 2020). Communication Barrier The Rio Tinto management is fluent in English, whereas Egyptians speak Arabic. The teams will require translators during interactions. Significant differences exist in communication styles and languages between and even within cultures. Language use may differ across various cultures. Certain words and phrases have different meanings in different cultures (Kristjánsdóttir and Karlsdóttir, 2020, p. 10). Nonverbal communication is an essential component of communication style across different cultures. Nonverbal communication includes more than just body language and intonation; it also includes seating arrangements, personal space, and gestures. Egyptians frequently use gestures, especially when they are very interested in the topic of discussion. There would be misunderstandings based on cultural norms regarding the right amount of assertiveness in communication, which can also be exacerbated. British colleagues may, for instance, be more alarmed by a boisterous conversation than their Egyptian colleagues. Arabs have a high-context style of communication. They often assume that the listener has

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Joint Venture 4 background information to what is being discussed; hence, they do not give more information on the subject. This would be a great challenge, especially for engineers working together, seeing that countries like the U.K. have a low-context culture of communication that is accurate and open (Mackey and Sitte, 2023). The management sent to scout the region might feel like a lack of transparency stems from the lack of disclosure of certain information. Employees in the U.K. are used to a courteous and amiable way of communication, hence maintaining a reactive culture. They would be required to work together with Egyptians who are multi-active communicators. Facilitators to improve rapport will be required in this setting (Szkudlarek et al., 2020, p. 86). Lack of clarity and consistency by the specialists who are supposed to guide Rio Tinto during the joint venture could result in internal resistance by senior employees and integration issues that impact the joint venture's overall results. Difference in Task Completion People approach finishing tasks in different ways depending on their culture. The British and Arabian cultures have different perspectives on time, perceptions of the benefits of task completion, access to resources, and the appropriate balance between relationship-built trust and task-oriented trust (Szkudlarek et al., 2020, p. 78). Employees from Rio Tinto are more time conscious and could take a shorter time to complete assigned tasks. Their colleagues from Aton Resources Inc. are more efficient and productive when there is urgency. Hence, they would take their time and do essential tasks just before the deadlines (Kristjánsdóttir and Karlsdóttir, 2020, p. 10). Rio Tinto management receives monetary compensation for the fast completion of tasks. Aton resources middle and senior employees are only recognized verbally; hence, they lack motivation to complete tasks faster. Cultural differences exist in the significance that different cultures place on building relationships and trust before or during the accomplishment of a task. For instance, Arabic culture places excellent value on building relationships early in a collaborative project before tackling the task (Rodolaki, Barakos, and Hitch, 2023). Rio Tinto management prefers to put all their attention into the task immediately, allowing relationships to grow while they work on it. This indicates that individuals from Rio Tinto and those from Aton Resources may pursue relationships differently. They may also show commitment and value in relationships to different degrees.

Joint Venture 5 Conflict Resolution Challenges Among the management of both companies, finances are likely to bring about conflict if there is no clarity among the financial experts who advise both parties; tensions can quickly flare up (Szkudlarek et al., 2020, p. 108). Rio Tinto's finance department may fail to provide adequate information on the type of funding needed, how long it will take to finish setting up the joint venture, where the financing for this and future projects will come from, and who will provide it (Whether they will share responsibility for capital and operation costs), and whether existing debt by the Aton Resources Inc needs to be taken into account (Rodolaki, Barakos and Hitch, 2023). Disagreements about the relative contributions to the joint venture and the amount of income and capital growth that both Rio Tinto and Aton Resources companies will receive from the merger are imminent. The owners of Aton Resources Inc. could maintain an unclear definition of when and how much the company should be sold. Conflict is generally not preferred in the U.K., although individuals are frequently urged to resolve disagreements amicably when they do occur. In order to resolve any issues that may arise in Rio Tinto Plc, in-person meetings are typically advised. On the other hand, open conflict is typically viewed as humiliating or demeaning in Egypt; instead, disagreements should be resolved in private (Szkudlarek et al., 2020, p. 102). The preferred way to resolve the disagreement might be through writing or mutual understanding privately. Inter-cultural conflicts could bring about emotions of inadequacy and inferiority among Aton Resources employees, who view their colleagues as more privileged, and ego and superiority among Rio Tinto employees since their company is the major shareholder in the joint venture. Lack of Awareness of Cultural Differences People often perceive those whose behavior is different from theirs as "abnormal," "weird," or "wrong." When the employees from Rio Tinto and Aton resources companies are unaware of their cultural disparity, prejudice develops individually. Prejudice becomes ingrained in the new institution (Szkudlarek et al., 2020, p. 50). The laws, rules, regulations, and practices that run the company are ignorant of this factor. The tendency is either intentionally or inadvertently incorporated into organizational structures. The management of the more prominent company, Rio Tinto, mastered the human inclination to interpret "different from me" as "less than me." Their colleagues may feel threatened by this and hold back on their potential.

Joint Venture 6 Understanding one another's cultural backgrounds does not have to keep us apart. Failure to recognize and appreciate cultural differences makes employees feel inferior, paralyzed by the fear of not saying the "right thing." Negligence of the cultural differences and similarities between the British and Arabian cultures can inhibit effective communication across various levels of the organization. Failure to understand each other’s cultures can make us feel like our way of doing things is only appropriate (Tashman, Marano and Kostova, 2019, p. 157). When the management and employees of Rio Tinto and Aton Research Inc. appreciate the value of cultural differences, they can question their assumptions about the right way to accomplish tasks and consider alternative strategies. The employees involved, especially in the initial stages of the Joint venture, can discover fresh approaches to issues that they had previously given up on. Finally, when the employees appreciate each other’s disparity, they become less lonely and appreciate the learning experience of interacting with people from different cultures. Failure to Adapt to Business Models of the Local Market Culture significantly affects the attitudes and behaviors of employees. Rio Tinto’s human resource models should be adjusted when the company enters the new market to consider regional tastes, traditions, and routines. The joint venture faces a high risk of failure unless local cultures influence their business models (Szkudlarek et al., 2020, p. 62). Failure in a foreign market can result in international retailers losing money for several years before shutting down or selling out. The "one-size-fits-all" strategy for conducting business internationally might be adopted during the joint venture. Global thinking is necessary for the success of the merger between Rio Tinto and Alon Resources. The intersection of localization and globalization is referred to as glocalization. Glocalization is the standardization and adaptation by incorporating local concepts with global concepts, ideas, or procedures. Glocalization suggests the coming together of different cultural systems to promote economic cooperation. Successful joint ventures, cross-cultural ones, also necessitate a thorough comprehension of regional management practices (De Mol et al., 2019). Rio Tinto Plc risks falling behind in its management and employee relations strategies if they do not fully understand the economic, political, regulatory, and cultural aspects of doing business in the Egyptian market. Rio Tinto’s management and human resource theories, models, and practices are heavily influenced by

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Joint Venture 7 cultural presumptions. Alon Resources has preexisting management strategies based on the country's culture. Although no one-size-fits-all organizational theory exists, management practices should incorporate both cultures for the business's success and employee satisfaction (Tashman, Marano, and Kostova, 2019, p. 156). Rio Tinto may need to consider cultural differences before exporting its concepts to Egyptian cultural contexts. However, cross-cultural translations of practices without considering cultural differences can backfire and result in significant losses. Conclusion Joint venture creation has surpassed many organizations' capacity to handle the ensuing cultural changes. Legal, political, technological, and economic barriers have received the most attention; cultural barriers are frequently ignored or undervalued (Tashman, Marano and Kostova, 2019, p. 153). In addition to missed opportunities, If Rio Tinto ignores the cross- cultural challenges likely to emanate from the joint venture, they are likely to experience poor market share, low or negative return on investment, legal issues, lost productivity, expatriate failure, and early contract, joint venture, and poor performance. Cultural differences resulting from miscommunications, conflicts, and prejudices should be assessed, and solutions suggested in the initial stages of the joint venture between Rio Tinto Plc and Aton Resources Inc. to prevent complete failure.

Joint Venture 8 References Ali, T., Khalid, S., Shahzad, K. and Larimo, J., 2021. Managing international joint ventures to improve performance: The role of structural and social mechanisms. International Business Review , 30 (3), 101791. Collinson, S., Narula, R., Qamar, A. and Rugman, A.M., 2020. International business . Pearson UK. De Mol, E., 2019. What makes a successful startup team? Harvard Business Review , 21 . El-Wardany, R. and Jiao, J., 2023. Perspective Chapter: History and Classification of Gold Mineralization in Egypt. In Rare Earth Elements-Emerging Advances, Technology Utilization, and Resource Procurement . IntechOpen. Kristjánsdóttir, H. and Karlsdóttir, F.B., 2020. U.K. foreign direct investment in the OECD, culture, and geography. Baltic Journal of Economic Studies , 6 (5), pp.8-14. Mackey, C. and Sitte, A.P., 2023. Focusing on the future: How Rio Tinto shapes modern and sustainable mining. Mining Report , 159 (1). Rodolaki, C., Barakos, G. and Hitch, M., 2023. The role of intercultural differences and challenges faced in negotiating active mine sites' rehabilitation objectives from Africa to Europe. The Extractive Industries and Society , 16 , 101362. Szkudlarek, B., Osland, J., Caprar, D. and Romani, L., 2020. The Sage Handbook of contemporary cross-cultural management. The SAGE Handbook of Contemporary Cross- Cultural Management , pp.1-600. Tashman, P., Marano, V. and Kostova, T., 2019. Walking the walk or talking the talk? Corporate social responsibility decoupling in emerging market multinationals. Journal of International Business Studies , 50 , pp.153-171.

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