Nora-Sakari Case Analysis
Nora-Sakari Case Analysis
Introduction
The Nora-Sakari: A proposed JV in Malaysia set in 2003, focuses on the possible joint venture between Nora Holdings Sdn Bhd, a leading supplier of telecommunications equipment which is based in Malaysia, and Sakari Oy, a Finnish conglomerate, which was a leader in the manufacturing of cellular phones and switching systems from Finland. Nora as well as Sakari was part of a group of seven companies that submitted a five year bid outlined by Malaysia’s national telecommunication company, Telekom Malaysia Bhd (TMB), to develop the country’s telecommunication infrastructure to align with the government’s Vision 2020 program. Nora needed the JV with Sakari to ensure it could meet the obligations for the TMB contract, specifically the switching technology. Also, it will give them the ability to utilize the tacit knowledge gained from working with Sakari to implement their model in the Malaysian market. The problem that arises is that the negotiations between Nora and Sakari are not moving in a positive direction. Many issues had risen that have stalled the negotiations about the joint venture, which include: 1. Cultural differences 2. Differences in organizational behavior between management 3. Disagreements by both parties on significant issues pertaining to: a. Equity ownership b. Technology transfer c. Royalty payment d. Expatriates’ salaries and perks e. Arbitration
The main issue outlined in this case is Nora’s decision to either continue with negotiations with Sakari or end the negotiations to enter a JV with another company because their time is limited due to the bid contract with TMB.
International Business
1
Kory Samuels
Nora-Sakari Case Analysis
Analysis
Cultural differences The culture of Nora was influenced heavily by strong Islamic beliefs and values. Similar to western cultures, Nora negotiated utilizing a relational, laid back approach, while Sakari negotiators were “serious, reserved and cold” (271). Nora’s
Introduction
The Nora-Sakari: A proposed JV in Malaysia set in 2003, focuses on the possible joint venture between Nora Holdings Sdn Bhd, a leading supplier of telecommunications equipment which is based in Malaysia, and Sakari Oy, a Finnish conglomerate, which was a leader in the manufacturing of cellular phones and switching systems from Finland. Nora as well as Sakari was part of a group of seven companies that submitted a five year bid outlined by Malaysia’s national telecommunication company, Telekom Malaysia Bhd (TMB), to develop the country’s telecommunication infrastructure to align with the government’s Vision 2020 program. Nora needed the JV with Sakari to ensure it could meet the obligations for the TMB contract, specifically the switching technology. Also, it will give them the ability to utilize the tacit knowledge gained from working with Sakari to implement their model in the Malaysian market. The problem that arises is that the negotiations between Nora and Sakari are not moving in a positive direction. Many issues had risen that have stalled the negotiations about the joint venture, which include: 1. Cultural differences 2. Differences in organizational behavior between management 3. Disagreements by both parties on significant issues pertaining to: a. Equity ownership b. Technology transfer c. Royalty payment d. Expatriates’ salaries and perks e. Arbitration
The main issue outlined in this case is Nora’s decision to either continue with negotiations with Sakari or end the negotiations to enter a JV with another company because their time is limited due to the bid contract with TMB.
International Business
1
Kory Samuels
Nora-Sakari Case Analysis
Analysis
Cultural differences The culture of Nora was influenced heavily by strong Islamic beliefs and values. Similar to western cultures, Nora negotiated utilizing a relational, laid back approach, while Sakari negotiators were “serious, reserved and cold” (271). Nora’s