Nora-Sakari Memo

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Nora Holdings Sdn Bhd
To:Zainal Hashim, Vice Chairman of Nora Holdings Sdn Bhd
From:Caterina Barraco, Consultant
Date:July 13, 1992
Re:Joint Venture Recommendation
To ensure compliance with the terms of the TMB contract, joint venture negotiations with Sakari must be successfully concluded. Negotiations to date have failed mainly due to a mutual ignorance of one another's cultural norms, not as a reflection of the potential success of a Nora-Sakari joint venture.

The following indicators suggest that Nora and Sakari are a good fit, and could successfully partner: Complimentary objectives – Sakari's main objective is to acquire knowledge of, and gain access to, South Asian markets for Telecom products. Nora is looking to secure a partner that will enable them to comply with the TMB contract, as well as to learn from Sakari's success and replicate that model in the Malaysian market. Skills and Resources – each company has the necessary skills to enable the other to meet their objectives. Nora is a leading supplier of telecommunications equipment in Malaysia, providing Sakari the opportunity to gain access to the desired markets. Sakari is able to provide flexible, modular switching technology which is based on an open architecture – not only enabling Nora to meet the terms of the TMB contract at a reduced cost, but positioning them to secure further contracts from TMB. Compatibility - Nora and Sakari are relatively small players in the telecom industry, both on growth trajectories. They both believe that research and development is the key to their continued success. Care and Attention – both companies have invested considerable time (more than 20 face to face meetings in both countries) and money in the joint-venture to date.

The disputed elements which are currently stalling the negotiations pertain to: equity ownership, technology transfer, royalty payment, expatriates' salaries and perks, and arbitration location in case of...
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