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Joint Ventures

Imagine you are the senior HR manager of a large manufacturing company based in the U.S. The CEO of your operations is considering establishing a joint venture in one of the following regions: Asia, Africa, North America or Latin America. Focusing on the concept of cultural distance, and assuming that your company will have a 50% representation on the supervising board of directors for the IJV, and a 50% stake in top managment of the IJV, what recommendations might you make for selecting a joint venture partner from amongst these regions? In other words, which region would you recommend and why?

We haven't gone over joint ventures yet in class....Any help would be great.

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I will select the Asian region because it is one of the fastest growing regions of the world and possesses two of the biggest emerging markets of the world, ie, China and India. Therefore, from growth perspective, Asia seems to provide the best bet.

Recommendations for selecting a JV partner in this region:

The primary selection criterion should be a partner's ability to provide the technical skills and resources which complement those of a firm seeking the partner. Of prospective partners cannot provide these capabilities, then formation of a JV is a questionable proposition. Therefore, technical complementarily should be viewed as a minimum qualification for selecting a partner.

JV's often have the best chance of long term success if both parties are comparable in sophistication and size, ...

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Joint Ventures