Why do some international joint ventures succeed whereas others fail Essay

Why do some international joint stakes succeed whereas others fail - Essay guinea pigHence owners can disagree on the international take chancess goals making the performance of the venture more difficult to define and measure than performance of conventional organizations. Therefore, disintegration of international joint ventures (IJVs) signals non only the failure of the joint venture but also a realization of agreed goals by involved partners. Various scholars draw upon various contextual and national factors organised in various conjectural persuasions to explain instability and failure of international joint ventures. First, the study considers benefits of conceptualising IJVs as cooperative or convenient collaboration and secondly draws on the distinctions to examine differences between instability and failure theories through structural and processual lenses. foreign joint ventures as cooperation experience instability from factors that erode trust, commitment, forb earance and other similar partnership qualities. For instance, a venture that lacks complimentary with the partner is bound to be unstable moreover, the same applies to ventures associated with significant partner differences regarding values, identities, goals, interests and practices (Salk and Shenkar, 2001). The perspective of selecting the wrong partner reduces the possibility of developing trust, which compromises cooperation making the venture vulnerable to instability. Another view conceptualises IJV as transitional organization, whose initial structure and internal dynamism create inevitable tendency to instability, which results in dissolution (Peng and Shenkar, 2002). The approach presumes that partners engage in IJVs with expedient motives seeing the partnership as a short-term legal instrument for serving their competitive self-interests by exploiting other partners weaknesses or gaining at the expense of other partners. Within this view, wiz variant stresses structura l factors to explain imminent instability of IJVs and the other theorises instability and failure as products of internal political processes. Early influential approaches emphasise the need for parent partner to establish appropriate political science structures because when expedience prevails, IJV pose great risks to the parents like the loss of technical or strategic capabilities to opportunistic deportment (Noe, Rebello, and Shrikhande, 2002). Most scholars are persuaded that that dominant equity control by one parent likely leads to venture success since benefits are associated with the unitary control framework (Hauswald and Hege, 2003). Similar to equity shares, which have gained dominant instruction control associated with the success of IJV, equal division of management control is associated with inter-parental disputes, instability and failure. Hence, structures suggest IJVs quite a little avails itself in control structures established in the original bargain. Howeve r, another complementary perspective argues that venture instability is a process dev eloped by parents in the lifetime of the IJV. As competition for competence, the IJV process involves multiple small bargains between parents as each seek to acquire the strength to exploit weaknesses of the other, the processual approach accentuate the conditional relation of bargaining power as each manoeuvre within the IJV structure to augment its control and execute its ends (Hamel, 1991 Inkpen and Beamish, 1997). Acquisition of knowhow appears to the central aspect in joint ventures, besides joint ventures seem to be transient in nature since there is no competition where optimal contracts are used. Moreover, duration of joint ventures relies on the