JOINT VENTURE

What specific problems face the Joint Venture General Manager? Discuss based on evidence from a cross-border joint venture or case with which you are familiar.



What specific problems face the Joint Venture General Manager? Discuss based on evidence from a cross-border joint venture or case with which you are familiar.

Problems Face the Joint Venture General Manager

By definition, a joint venture formed by two or more than two legally distinct organizations (called parent companies). Each of the latter actively involved in decision-making in the jointly owned entity. Therefore, a joint venture considered international when at least one parent organization headquartered outside the country where the activities take place of the joint venture (Lu 2007, p. 74). Traditionally, international joint ventures were created to exploit markets or technologies and devices of their parent firms considered having marginal importance to maintain the competitive advantage of the parent firm. However, these joint ventures increasingly used as strategic tools to compete in international markets or global. An increasing proportion of international joint ventures is growing so early in activities or baseline of the parent firms, and there is also cooperation between firms that are potential competitors.

However, although a very large potential, international joint ventures often have problems with their performance, particularly in achieving the strategic objectives of firms parent. One of the reasons most frequently cited is the natural division of property rights and decisions in the joint venture, each partner to give up some control over the activities of the joint venture. Therefore, two exercise effective coordination of some or all activities of the international joint venture can help increase the likelihood of achieving behavior or desired outcome.

Sirmon and Lane (2004) propose a model of cultural differences and international alliance performance to explain the ambiguous findings regarding the influence of national cultural differences on alliance performance. Building on research on national, organizational and professional cultures, they argue that the closer the domain of a social group is to the value-creating activities of an alliance, the more disruptive cultural differences between the partners' members of that social group will be. Organizational culture differences will tend to be more disruptive than national culture differences and differences in the professional culture most relevant to the alliance value creation typically will be the most disruptive.

Although prior research has also suggested other factors that might be critical to joint venture success, the five factors that have been consistently identified as being important to joint venture performance were selected for consideration in this study. Further, these five factors are meaningful to the conceptual framework proposed in this paper as they potentially can have varying effects on joint venture performance. A distinguishing feature of this paper is that it examines the perspectives of the respondent companies with respect to the influence of "soft" variables, such as autonomy, trust and culture, on the effective management of these international interfirm relationships. The intention of the study is not to develop new theoretical perspectives on joint venture performance, but rather to ...