1. International Joint Ventures

2. Agenda Definition of IJV
Difference between domestic and international joint venture
Types of IJV
5 Focal Areas of IJV
Recommendations
Conclusion

3. Definition of IJV
A newly formed company by two or more enterprises in two or more countries.
The purpose of an IJV is to acquire technical know-how, production equipment, distribution facilities and/or capital endowment as well as to develop a new product or manufacturing process.
The primary motive in most cases for the creation of an IJV is to close the gap between strategic intent and resource availability to achieve a strategic objective not attainable by acting autonomously.

4. Difference Between Domestic and IJV
Domestic joint venture
International joint venture
To seek collusive practices
To facilitate the penetration in new markets
To get access to the know-how of the others
To develop a new product and/or production process
To penetrate new sectors
To reduce risks of cross-border transactions
More than one partner
Small number of partners
Partners have similar size
Partners have different sizes
Greater predominance of equal equity
Less balanced distribution of equity in IJVs

5. Types of IJV
Independent IJV
Shared management IJV
Dominant parent IJV

6. 5 Focal Areas of IJV Diversified workforce Management control Conflict
Managing Change for Competitiveness
Job Insecurity

7. Diversified Workforce
Positive Impacts of Diversified Workforce
Improved organizational performance
Diversified workforce can create a creative and innovative knowledge base
Higher Quality Problem-Solving in Teams
Negative Impacts of Diversified Workforce
Diversity Can Increase Coordination and Control Costs
Culture Shock--Toronto Hotels

8. Management Control
Who actually controls the operation can depend on who is responsible for the day-to-day management of the IJV.
Top manager will be expected to make decisions that deal with the demands of both companies.
The most common management error in IJVs is a tendency for each partner to want control.
Control plays an important role in determining a firm’s ability to achieve its strategic objective.

9. Management Control
Without effective control efforts, firms are likely to experience increased difficulty in successfully managing their operations and achieving their objectives.
This is a particular concern in the case of IJVs since, due to the shared ownership and decision making nature of these ventures

10. Conflict Sources of Conflict: Cultural differences between partners
The desire for control and autonomy
The differences in goals
Role conflict and role ambiguity

11. Conflict Negative Impact on IJV
Create stress, hostility, dissatisfaction, low productivity, difficulties in decision making, and distortion of reality
Positive Impact on IJV
Conflicts serve as filters of incoming information
Conflict also serve the creation of alternative solution to unexpected managerial situations

12. Managing Change for Competitiveness
Restructuring Organization (Godrej Soaps Limited –P &G)
Restructuring Supply Chain ( Tata Engineering- TELCO, contracts with small manufacturers to supply complete subassemblies instead of components )
Redesigning Management Practice (Maruti Udyog Ltd- Suzuki Motors)

13. Job Insecurity Definition Effects Employee Health Wellbeing
Job Attitude
Work Behaviour
Case
IJV Between Western Companies and Chinese Companies

14. RECOMMENDATIONS

15. Diversified Workforce
Organizations are constantly seeking to maximize the benefits of diversity while minimizing the drawbacks. A number of strategies that can be adopted by organizations seeking to benefit from diversity, Leadership, Organizational Policy and Providing Training and Development are most recommended.
Leadership and Organizational Policy
Providing Training and Development

16. Management Control
Recruitment and staffing of IJV employees, particularly those in the venture’s top management position.
IJV partners should involved in the recruitment and selection of staff.
Performance appraisal will be left to the discretion of the new general manager.
Appraising employee performance is important because it provides information about how well jobs are being performed and objectives are being met.

17. Conflict Job design clearly define the roles and goals Regular meeting
provide more opportunity for people to communicate with each other due to the cultural differences
Teamwork assignment
provide opportunity for people to work with each other and get more involved within the organization

18. Managing Change for Competitiveness
Reinforce the vision of the future.
Keep the vision of where we want to get to, crystal clear in our minds.
Reduce ambiguity.
Emphasize benefits.
Minimize the pain of the transition.
Have a plan of action to reduce the chaos.
Celebrate every little success.
Reward effort, even when the results are not perfect.
Ensure the consultant is highly experienced in organization-wide change.

19. Managing Change for Competitiveness
Seek Consultants advice
Seek to manage change instead of controlling it.
Maintain a flat organizational team structure and rely on minimal and informal reporting requirements.

20. Job Insecurity Employer Benefits Good Job Performance
Good Organisational Citizenship Behaviour
Trust In The Organisation
Reduction Of Job Insecurity

21. Closing Thoughts…
IJV are becoming a popular means to enter competitive markets for global giants. However, the risks of cross-border expansion still remains. To have a successful IJV, both partners should have a good understanding of each other’s cultures, establish a good work collaboration and work towards a common objective. The risks of cultural integration would still exist - often times management from both the sides often ignore the cultural integration issue assuming that they can take care of it - but cultural integration often falls between the cracks - and the IJV ultimately fails.

22. Thank you