The Joint Venture Process in International Business

Trade between developed countries has increased so much in recent decades that it tends to obscure the less obvious but considerable potential of business opportunities in the developing nations. To the businessman thinking of investment in an underdeveloped market the whole issue is fraught with uncertainties of which the structuring of investment and choice of partners are perhaps the most important.With this book J. W. C. Tomlinson Senior Lecturer in International Business at the Manchester Business School Manchester, England, paves the way for such businessmen, especially those interested in investment in India or Pakistan. He sets up a framework for a model of the decisions and dimensions involved in establishing and operating joint ventures in international business.The author bases his study on evidence collected from top executives of 50 British firms with investments in India and Pakistan. Some of his conclusions may be surprising. He finds, for instance, that the probability of joint ventures seems to be inversely related to the size of the foreign parent company and to the latter's prediction for control over a joint operation. He also finds that the apparently attractive compromise of 50-50 joint ventures usually turns out to be a snare and a delusion. In general, if more effective search procedures were available. There would be more potential local associates for joint ventures in less-developed countries than the literature suggests. Most significantly, host government partners are rarely a hindrance and often the most compatible associates for a foreign investor.It appears that the decision to go into a joint venture, the selection of partners, and the manner in which it is set up are only partially determined, if it all, by considerations of bilateral monopolistic advantage. Initiation, promotion, and development of new ventures tend to be the responsibility of individuals of special-interest groups.Hitherto, the area of joint operations in international business has been examined only descriptively. Here is a study that analyzes the subject rigorously and in depth, providing detailed information of the results of a type of operation that is likely to become increasingly significant.