MGT 250 Lecture Notes - Lecture 26: Organizational Culture
19 May 2018
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• Forms For Global Business:
➢ Strategic Alliances: combine key resources, costs, risks, technology, &
people.
➢ Joint Venture: occurs when 2 existing companies collaborate to form a third
company.
o 2 founding companies remain intact & unchanged.
o Together they now own newly created joint venture.
▪ Advantages of Global Joint Venture:
❖ Help companies avoid tariff & nontariff barriers to entry.
❖ Companies participating bear only part of the costs & risks of
business.
◆ Many companies find this attractive b/c of the expense of
entering foreign markets or developing new products.
❖ Smaller local partners who link up w/ larger, more experienced
foreign firms can bring advanced management, resources, &
business skills to joint venture.
▪ Disadvantages of Global Joint Venture:
❖ B/c companies share costs & risks w/ joint venture partners, they
must also share profits.
❖ Represent a merging of 4 cultures:
1. The country & organizational of first partner
2. The country & organizational culture of the second partner.
❖ Each partner in global joint venture will have equal ownership &
power.
◆ This can result in power struggles & lack of leadership
.
◆ Companies forming global joint ventures should carefully
develop detailed contracts that specify obligations of each
party.
find more resources at oneclass.com
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Document Summary
Strategic alliances: combine key resources, costs, risks, technology, & people. Joint venture: occurs when 2 existing companies collaborate to form a third company: 2 founding companies remain intact & unchanged, together they now own newly created joint venture, advantages of global joint venture: Help companies avoid tariff & nontariff barriers to entry. Companies participating bear only part of the costs & risks of business. Many companies find this attractive b/c of the expense of entering foreign markets or developing new products. Smaller local partners who link up w/ larger, more experienced foreign firms can bring advanced management, resources, & business skills to joint venture: disadvantages of global joint venture: B/c companies share costs & risks w/ joint venture partners, they must also share profits. Represent a merging of 4 cultures: the country & organizational of first partner, the country & organizational culture of the second partner. Each partner in global joint venture will have equal ownership & power.
