How to make a global joint venture work

Abstract

Despite the great potential for conflict, many companies routinely-and successfully-use joint ventures. In this chapter the author, drawing from his research with thirty seven joint ventures involving mostly North American and Western European companies, explores the different ways executives can tailor their management approach to the specific needs of the enterprise. Joint ventures do have a high overall failure rate, and many of the failures are very costly for the partner companies. Joint ventures are common in oil and gas exploration. In shared management ventures both parents manage the enterprise. While shared management ventures can arise in any industry, they are most common in manufacturing situations in which one parent is supplying technology and the other knowledge of the local market. Majority ownership and dominance of a joint venture do not necessarily go hand in hand. The parent holding only 24% of one venture's shares was its exclusive manager.

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