A Review of Literature on How to Manage International Joint Ventu...

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A Review of Literature on How to Manage International Joint Venture Successfully

By | Jan. 2013
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A Review of Literature on how to manage International Joint Venture successfully. By Samaila Umar

There is serious increase in the number of organisations seeking to operate in today’s highly competitive global markets with sustainable competitive advantage. (Taylor, 2004; Ernst & Halevy, 2004). In order to achieve this international expansion, companies use different market entry strategies. Earlier study on IJVs reveals that international joint ventures are the most common means of internationalization (Ernst & Halevy, 2004). This paper shall present a review solution on how to achieve successful IJV alliance In general, international joint venture (IJV) is an equity sharing arrangement between a local firm and a foreign cooperation (government or private) coming together by putting all necessary resources together, sharing risk and operational controls to operate as one independent business entity to accelerate profit and growth or in order to achieve some strategic goals. (Craig C. Julian. 2000). In most IJVs, two companies merge together for the matter of ease and convenience, the two companies involve become the parent of the organization that surface from the merger (Geringer & Hebert, 1989). But there are situations where more than two companies form IJV, this is true in cases where already merged companies try to merge with other bigger companies to establish a single organisation “T0o compete in an international business environment, firms are forming joint ventures as a mechanism for the enhancement of global competitiveness.” (Cyr, 1995)” IJV can aid an organisation in achieving their business objectives in hostile and uncertain markets (Miller et al., 2007). Clayton-Smith (2012). Suggest that IJV “offer a great opportunity for multinational businesses to facilitate growth, to gain skill, capabilities, market access, etc.” (For example businesses can cut cost and boost growth by using the same human resources, deliver services with...
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