Joint Ven

Topics: Joint venture, Strategic alliances, Collaboration Pages: 11 (3261 words) Published: August 22, 2013
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Introduction……………………………………………………………………………….…4 Literature Review……………………………………………………………………………..5 How start-up stages are managed that determines alliance success……………..….5 Early stages of ventures are fraught with ambiguity and uncertainty………….….5 Managers emphasize technical/legal over people issues……………………………8 Results and Discussion………………………………………………………………………9 Conclusion……………………………………………………………………………..……13 Reference List…………………………………………………………………………….....14

Abstract
Recent surveys show that highly successful global organizations consider strategic alliances are necessary to enhance their competitive strategies. However, the barriers to successful joint ventures and international collaborations are challenging. In many cases, these barriers emerge during the start-up stages of an alliance. The objective of this paper is to identify and analyze the different types of challenges the organizations should evaluate during the early stage of their alliances. It is based on a literature survey and the findings of Canadian high technology industry. The study shows that the key challenges in the first year of joint ventures/international collaboration relates to relationship issues, which arise between the partners. It recommends stronger focus on these issues while designing and implementing a joint venture or collaboration. The paper concludes with suggestions to build an effective and long lasting working relationship between partners.

Introduction
Global companies actively search new possibilities to create and sustain a competitive edge in today’s business environment in which the capabilities to adapt and respond are crucial for survival. Interestingly, this method of search necessitates a radical rethinking of business models and organizational boundaries. The traditional go-it-alone business model has now become stagnant even for the best resourced organizations, and in order to sustain competitive advantage several companies have expanded their business operations by forming joint ventures or collaborations with other companies worldwide. Emerging models of alliances focus on relationship-based organizational structures and cooperative strategies, which are highly flexible and show an ability of responding to rapid and radical changes occurring in the marketplace and technological developments. Inter firm cooperation has attained a feverish growth over the past few years. Throughout the 2000s, some studies estimate that the number of joint ventures increased at a rate of around 22% annually (Child & Faulkner 2008). Harbison and Prekar (2008) stated that 32,500 strategic alliances were formed worldwide between 2004 and 2007 alone. For hi-tech companies, which attract a large number of collaborations in particular, alliances have formed the forefront in their competitive strategy. Despite the growing popularity of joint ventures, collaborative success remains elusive for many organizations. Evidence also demonstrates even those ventures, which eventually were successful must have frequently encountered serious problems in their start-up years. For instance, Bleeke and Ernst (2003) found that 65% of the cross-border alliances they studied faced serious managerial problems in their first two years. A Bain and Co. study observed for every ten joint venture negotiations, which end in an agreement, six will fail to meet expectations of partners and of the other four, only two will survive for a longer period (Rigby & Buchanan 1994). Researchers emphasize that a challenge of strategic alliance management is to convert collaborative agreements into effective and productive relationships. Thus, this means giving close attention to the relationship issues of alliances, particularly during the early stages of the venture. However, few studies have tried to examine how the process of cooperation between organizations...
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