There was sound logic behind the joint venture with the two enterprises contributing their individual competences, which are Sony’s superior technological electronics and marketing capabilities and Ericsson's firm cellular knowledge and operator links (Kantrow, 2003). Nevertheless, problems began to emerge after the creation of Sony Ericsson. SE experienced issues with merging the company cultures, oversupplied markets, brand range, product delays, logistic troubles, supply chain management inefficiency and the structural flaw of a rational organizational model.
From the outset, SE fell victim to those common problems faced by many companies who enter into a joint venture such as an unbalanced product line-up, intense competition (Kantrow, 2003) and the issue of merging two product lines. In the early stages of the joint venture Sony was manufacturing personal digital assistance CLIE, managing Palm OS. Simultaneously SE was in the process of developing smart phones with functions that paralleled CLIE, running trouble operating system. The crucial concern of an overlapping of product line and its ineffectiveness was one that needed to be addressed.
The rational management model implemented by SE involved planning and decision making beginning at top level management and then filtering down. The problem with this management practice is that the time drawn into making decisions may have affected SE as mobile market is dynamically changing market. Additionally the management style is very rigid and limits innovation.
Another primary issue common with most international joint ventures is the contrast and differences in management and organizational culture of the two parent firms. Understanding the different management cultures both companies had and respecting it was difficult. Cultural disparity between the managers of SE produced character-based trust