Chapter 7

Question 1

Who does the IJV belong to?

Answer 1

It is a separate legal entity that does not belong to either parent

Question 2

What differs an IJV from a JV?

Answer 2

One of the parent’s HQs must be outside the country in which the IJV operates (International!)

Question 3

What are some benefits both partners receive from an IJV?

Answer 3

1. The IJV creates greater market power by combining resources.
2. Distributes risk between partners.
3. Economies of scale.
4. Cooperation better than competition.

Question 4

What does the foreign partner contribute to an IJV?

Answer 4

International knowledge and connections.
Reputation.
Access to international markets and resources.
International distribution.

Question 5

What does the local partner contribute to an IJV?

Answer 5

Knowledge of government regulations and connections.
Access to local markets and resources.
Local distribution.

Question 6

What are the two big determinants of finding a compatible partner?

Answer 6

COMPATIBILITY AND FIT (FEET)!!!

Compatibility in interest, SIZE, and goals.

Question 7

How is trust between partners influenced?

Answer 7

Changes in the environment.
Fit between national cultures.
Fit between organizational cultures.

Question 8

What is the biggest source of mistrust

Answer 8

Brain drain! Sending top people to IJV.

Question 9

Do you know Feder and Werther (1996)?

Answer 9

Refer to slide 15 for 8 steps.