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Research indicates that 50 to 70% of all
joint ventures fail. Not many CEOs of joint ventures
characterized their venture as "very successful".
The most
common causes of
joint venture
failure are ❶
Cultural differences;
❷ Poor or unclear
leadership, and ❸
Poor integration process...
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Below are some factors that contribute to the
poor track record of international joint ventures:
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▪ Conflict over delegation of
decision-making to the local joint venture management by a foreign
partner which sees the JV operations as only a small part of the
global picture and is trying to maximize profits globally, while the
local partner is trying to maximize profits locally.
▪ Disagreement between the partners over
operating policies,
strategies,
and tactics in the local market.
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▪ Differences in the approach of each
partner towards
management
style
(decision-making,
communication,
delegation, and so on) and systems (performance
management,
accounting, control, and so on)
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