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    Control Systems for International Joint Ventures in Japan

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    Control and monitoring systems are important for the success of international joint ventures (IJV). These systems support the management and communication among international subsidiary operations that would otherwise be difficult to monitor company performance. The two types of control systems; direct and indirect controls have sub controls that offer methods of implementation. Montoring systems assist in performance evaluation and depend on several factors to result in an effective system. Control and monitoring systems should coincide with international business operations and organizational structure common for a particular region.

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    Considerable Variables for Designing an Organizational Structure:
    In an effort to develop an effective business plan for the IJV in Sweden, the Japanese parent company ought to consider variables when constructing the organizational structure. Li says control system variables are significant to the design of an organizational structure and include variables such as ownership in the company, interdepence between parent companies and joint ventures, and strategic monitoring by the parent companies (2003).

    Equity ownership includes all or one of these three distinctions: the prerogative to acquire the asset and/or the fiscal value; the prerogative; to influence decisions over the use of the asset; and the prerogative to obtain information on the status of ownership (Li, 2003). In regard to assets, it is essential to preserve a significant level of control to protect against those with unprincipled intentions (Jung, 2008). Those individuals that acquire ownership in the company also hold positions on the board of directors, and are able to influence decisions when hiring managers, sourcing the management team, providing the bookkeeping, preparation, and ...

    Solution Summary

    The Solution provides a 600 word discussion on international joint ventures as they apply to Japan.