Reasons for Failure of Joint Venture---Case of Tcl & Alcatel Joint Venture
Table of Contents:
1.1_Executive Summary 2
2.1_Introduction 3
2.2_Main Body 4-8 2.2.1_Case outline 4 2.2.2_Culture differences 5-6 2.2.3_Poor leadership 6-7 2.2.4_Insufficient planning 7-8
2.3_Conclusion 8
2.4_Recommendations 9
3.1_Reference list 10
4.1_Appendix 11
Executive summary:
In the contemporary society, many multinational enterprises would like to use joint venture as their favorite entry mode due to its unique advantages, such as: directly access to the local partner’s knowledge, sharing development costs and risks. Meanwhile, it is important to figure out the factors that will cause failure of joint venture. Generally, 3 major factors: culture difference, poor leadership and insufficient planning which are all fatal to the operation of joint venture. Cultural differences have direct influences on international joint venture performance through management practice and organizational learning; poor leadership will result in a bad business integration and even wasting the preciously initial injection funds; insufficient planning may trouble company in the long term. For example: high financial risk and poor financial condition. In addition, this report correlates the theory with a famous case of failed joint venture--- TCL & Alcatel, to prove the validity of theory that referred in this report. And moreover, give some suggestions for TCL to break off the dilemma
Introduction:
To date, if a company wants to speed up the expansion, it may decide to use surplus resources or raise further cash by cooperating with another existing business. As one of the popular entry modes, joint venture is now been utilized by many multinational enterprises due to its unique advantages: share costs and risks with partner, reduce political risk and benefit from local partner’s knowledge of market. Joint venture can be defined as an entity formed between two or more parties to undertake economic activity
1.1_Executive Summary 2
2.1_Introduction 3
2.2_Main Body 4-8 2.2.1_Case outline 4 2.2.2_Culture differences 5-6 2.2.3_Poor leadership 6-7 2.2.4_Insufficient planning 7-8
2.3_Conclusion 8
2.4_Recommendations 9
3.1_Reference list 10
4.1_Appendix 11
Executive summary:
In the contemporary society, many multinational enterprises would like to use joint venture as their favorite entry mode due to its unique advantages, such as: directly access to the local partner’s knowledge, sharing development costs and risks. Meanwhile, it is important to figure out the factors that will cause failure of joint venture. Generally, 3 major factors: culture difference, poor leadership and insufficient planning which are all fatal to the operation of joint venture. Cultural differences have direct influences on international joint venture performance through management practice and organizational learning; poor leadership will result in a bad business integration and even wasting the preciously initial injection funds; insufficient planning may trouble company in the long term. For example: high financial risk and poor financial condition. In addition, this report correlates the theory with a famous case of failed joint venture--- TCL & Alcatel, to prove the validity of theory that referred in this report. And moreover, give some suggestions for TCL to break off the dilemma
Introduction:
To date, if a company wants to speed up the expansion, it may decide to use surplus resources or raise further cash by cooperating with another existing business. As one of the popular entry modes, joint venture is now been utilized by many multinational enterprises due to its unique advantages: share costs and risks with partner, reduce political risk and benefit from local partner’s knowledge of market. Joint venture can be defined as an entity formed between two or more parties to undertake economic activity
References: Kotelnikov, V 2007, ‘Most common causes of joint venture failure’ http://www.1000ventures.com/business_guide/jv_failure_reasons.html (Accessed: 27/04/2010) Marney, C 2009, ‘Joint venture: success and failure’ http://va4growth.com/blog/?p=591 (Accessed: 27/04/2010) Tang, R 2007, ‘Culture differences and international joint venture performance’, vol. 28, no. 3, summer, pp.87-98 ‘TCL- Alcatel—A “perfect” sample of failed joint venture (in Chinese)’, Chinese computer users, 02 January, 2008, p