International Joint Venture Essay Example | Topics and Well Written Essays - 4000 words

International Joint Venture - Essay Example Problems are majorly experienced in development, organization and management; these make the IJV to fail to achieve its projected goals. These challenges are a result of diverse objectives and motivations of the partner companies, making the art of balancing their operations an issue. Further, management will have to problems in planning and when trying to balance the mutual benefits for the partners. Inefficiency in the human resource management majorly contributes to failures of IJV (Faulkner and Geringer 2000; Desai, Foley and Hinles 2004). Additionally, political systems, economic state, legal system, difference in partners and conflicting contracts have an upper hand in determining the performance of management. The human resource issues are challenges faced by management of the IJV in its day-to-day activities and solution will be attained once an efficient human resource manager with expertise on international collaboration is employed. The politics also pose some challenge as they can come up with policies that may threaten the success of the collaboration. Management should make reasonable political judgment since political appraisal that is present in some is something to avoid. The two partners may enter into a merger with a view of eliminating duplication of resources and processes thus fostering greater efficiencies in management. Culture differences pose another challenge to IJV. For instance, collaboration between Pirelli and Dunlop failed in the 1980’s due to differences in the English and Italian cultures (Barkema, Bell, Shenkar & Vermeulen 1997). Strong Charter Establishment of a strong charter to aid in securing partners with the necessary attributes required to enhance success... International Joint Venture Collaboration has had several impacts on the sustenance of businesses in the market as well as their extinction. Market volatility brought about by changes in customers’ expectations, new entry of competitors in the market, dynamics in economic climate have posed great damage to many businesses. Management should employ strategic corporate policies in managing the venture in areas of human resource, supply chain, innovation, production and customer service. The management of IJV should recognize innovation as the major drive in growth of companies and their prosperity. Together with economic dynamics and globalization, technological change has favoured the growth of IJV’s. Despite the challenges facing the success of IJV, companies should engage in efficiency management system as this will help in combating all the challenges and enhance performance and productivity of the firm. Furthermore, companies should use collaboration as stepping stones to innovation and creativity as this will aid in coming up with ideas that will make the companies to be the leader in the market and enjoy the advantages of large scale operations. For companies to be successful when they enter into collaborations, they should first have a clear understanding of the strategic objective of the relationship they intent to create before focussing on the risks and benefits to be obtained. Collaboration is geared at enhancing business growth.