Types of Business Flashcards
1
Q
What is a joint venture?
A
A seperate business entity, created by two or more parties involving shared ownership, returns and risk
2
Q
Why do people embark on a joint venture?
A
Usually looking to benefit from shared strengths and resources. Often used in international markets.
3
Q
What are the benefits of a joint venture?
A
- Benefit from expertise and resources
- Reduces risk
- Reduces cost
4
Q
What are the drawbacks of a joint venture?
A
- Risk of a clash in organisational culture
- Conflict of objectives - one may be big on CSR for example
- May be imbalance of power due to one firm being bigger or having more expertise
