Case study analysis and discussion

Management Principles

The technical skills used by Mittal were his marketing skills and the technological capabilities of his joint venture partners. The human skills that were used by Mittal was his ability to formulate alliances with foreign firms and domestic players. The conceptual skills that Mittal used to start and operate the business were primarily vision and long-range strategy.

In terms of technical skills, Mittal started his company with a set of marketing skills. Bharti has been able to demonstrate considerable marketing savvy. The company's knowledge of the Indian market includes not only getting product to the market, but then leveraging that market penetration to great effect. One example is the deal that Bharti Airtel formed with the Wall Street Journal to distribute that paper's content to its subscribers in India (Ng, 2010). This ability to market successfully in India is based on a set of marketing technical skills that foreign partners wished to access.

By the same token, Sunil Mittal was able to grow Bharti through the use of technology and management systems borrowed from Western companies. The Western companies provided the technology upon which the business was based. Thus, the business of Bharti Airtel was founded on the blend of the technical marketing skills of Sunil Mittal and the technological knowledge of the Western partners.

That these joint ventures were able to be formed speaks volumes about the human skills of Sunil Mittal. Each of the companies with whom Bharti formed a joint venture -- IBM, Siemens, Ericsson and Nokia -- wanted access to the rapidly growing and potentially lucrative Indian market. Mittal understood this, but he also understood that he would have to compete for these partnerships with other major Indian firms. It was his skill in negotiating and deal-making that allowed these ventures to be formed, which in turn allowed Bharti to outgrow traditional large firms like Reliance and Tata.

This could not have been accomplished without significant vision on the part of Sunil Mittal. He was able to visualize that his company would be much larger than that of his rivals even at a time when it was much smaller. This vision drove Sunil to forge these alliances. He knew what needed to be done and how the deals needed to be structured in order for Bharti to become the company he envisioned. This ability to conceptualize the company and the means by which that company could be built is what allowed for Bharti to experience such a rapid growth trajectory. Mittal has also applied this vision to building his other businesses, including the insurance venture with AXA and the retail venture with Wal-Mart.

Question 2. There are many potential points of difficulty with international joint ventures. The first is that the strategies of the two partners may not be properly aligned (O'Connor & Chalos, 1999). In this situation, the partners may have a short-term alignment but may not have a long-term alignment. As such, the benefits of the joint venture may be short-lived or entirely non-existent.

The area of human resources also provides multiple points of challenge. Managerial styles may differ, labor laws may differ, corporate cultures may differ and compensation and motivation schemes may differ, among the potential human resources pitfalls (Cyr, 1995). Mittal's foreign partners could be responsible for any number of these different challenges, in particular to the degree that they impose their own human resources systems and philosophies on the joint company.

In addition, another challenge that may be faced Bharti with respect to the joint venture partners is the challenge of trust. Because the partners want to gain knowledge of Indian marketing tactics and Mittal wants Bharti to gain knowledge of Western technology, there may be a lack of trust between the two parties. While these motivations are obvious to both parties, the degree to which this could result in a competitive rivalry will impact on the success of the joint venture. For example, the building of cell phone towers with Vodafone has resulted in that firm competing directly and vigourously against Bharti Airtel. Indeed, the two are now among four firms competing for three 3G spectra (Times of India, 2010), implying that if competition had not erupted between the two that Bharti would have been able to gain access to the spectra without engaging in a bidding war. Trust has been shown by Ng, Lau and Nyaw (2007) to be a precursor to success in international joint ventures.

Question 3. In order to deal with the concerns outlined above, Sunil Mittal can take a number of different steps. To deal with the concern of strategy misalignment, Mittal needs to put into place complex management and governance systems. This is required of international joint ventures specifically to ensure that the joint venture is always working towards the strategic objectives of both parent companies, not just one. Without such structures and systems, the joint venture will suffer from operational instability and resource misallocation (Luo, Tan & O'Connor, 2001).

Some of the human resources challenges can be addressed at the operational level. Training can be introduced in order to prepare foreign managers entering India for the norms of that business culture. In addition, management of both parent companies should lay down the framework for improved cross-cultural understanding. Communication should be at an enhanced level, where messages are made to be clear. This is particularly important given the nature of the joint ventures, where most managers from each company are using English, which is not their first language, as the primary language of communication.

Lastly, trust can be fostered between joint venture partners. Girmscheid and Brockmann (n.d.) propose that trust between parties can be mediated. Communication should act as a symbolic interaction between the parties -- therefore the more communication the more trust can be fostered. Both parties will be aware of the benefits of the venture to each other, but any changes in the benefits or objectives should be revealed through communication. It is not necessarily the case the changes in circumstances would be viewed negatively. In a changing environment, both parties will be subject to constantly changing objectives and tactics. Communication between the parties is the best way to foster trust in the joint venture process, and this in turn will increase the chances of the joint venture enjoying success.