1. Chapter Fifteen: 15.1 INTERNATIONAL JOINT VENTURES
INTRODUCTION
WHY FORM AN IJV?
THE COMPATIBLE PARTNER
EXPLAINING SUCCESS AND FAILURE
SHARING CONTROL
IMPLICATIONS FOR THE MANAGER
SUMMARY
EXERCISE.

2. Chapter Fifteen: 15.2 REASONS FOR FORMING AN IJV
In addition to financial rewards, the IJV offers opportunities to
create greater market power by combining resources
reduce risk by sharing risk
reap economies of scale
cooperate in order to avoid expensive competing
benefit from the transference of technology
acquire new management systems
regain a competitive edge

3. (15.2) acquire symbolic benefits
acquire experience as the first stage to taking over the project
(the foreign partner), meet official requirements for doing business in the country
(the foreign partner), learn about local markets and develop customer networks
(the foreign partner), gain access to local resources, including production facilities, labor, and materials
(the local partner), generate up-stream and down-stream industries
(the local government) encourage foreign investment.

4. Chapter Fifteen: 15.3 WHAT THE PARTNERS CONTRIBUTE
THE FOREIGN PARTNER contributes
international know-how and access to international connections
international reputation
access to international product markets
access to international labor markets
access to international finance
access to international technologies
access to other international resources
international distribution

5. (15.3) THE LOCAL PARTNER CONTRIBUTES
access to local connections, including government contacts
local reputation
knowledge of government regulations
knowledge of local culture
access to local product services
access to local labor markets
access to other local resources
local distribution.

6. Chapter Fifteen: 15.4 THE COMPATIBLE PARTNER
The company is looking for a partner with which it has
STRATEGIC FIT
RESOURCE COMPLEMENTARITY
COMPATIBILITY IN SIZE
COMPATIBILITY IN TIME-SCALES
TRUST

7. Chapter Fifteen: 15.5 TRUST AND MISTRUST
The possibilities of success and failure are heavily
influenced by the trust and mistrust between the
different parties involved. Possibilities of success are
increased when there is TRUST
between partners
within the IJV
between staff posted to the IJV and their headquarters
between the IJV and its local environment

8. (15.5) Trust is influenced by changes in the environment
fit between the national cultures
fit between the organizational cultures
Trust is increased by the development of a
COMMUNICATIONS PLAN.