Posted by: Geoff Wing | September 30, 2009

French-Chinese yogurt joint venture sours due to cultural unintelligibility

danone yogurt

From today’s Wall Street Journal, “Danone to Exit Joint Venture With China’s Wahaha”:
Cultural intelligence failures in business repeat themselves. This time it’s between a French yogurt giant seeking entry into the Chinese market through a joint venture with a Chinese milk giant. I am sure that nobody involved wants to admit that it happened because both sides failed to be aware of how their own culturally specific values and assumptions about relationships, business, and power caused each to behave in ways mutually incomprehensible to each other. As the impending divorce escalated and the French and Chinese media and governments got involved, the stakes got higher and the gap of mutual incomprehension grew to create angry accusations between countries, not just companies.

I said that history repeats itself. Read this article from about 1998 about an American firm entering the Japanese market, written by Christopher R. Keener.
The place, time, and details are different but the business failure and the mutual lack of trust comes from a similar lack of cultural self-awareness. Being culturally aware is about knowing yourself first, so you may know and engage the other better.


  1. Has anyone experienced or heard of similar stories?

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