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A ¦
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more parties to undertake an economic activity together. It is a term more
restricted to the US and the 'new' countries on the world map such as India and
China.

The JV parties agree to create, for a finite time, a new entity and new assets by
contributing equity. They then share in the revenues, expenses, and assets and
"control" of the enterprise.

The term is not used in the U.K. where 'company law' originates. In European
law, the term 'joint-venture' is an elusive legal concept, better defined under the
rules of company law. In France, the term 'joint venture' is variously translated
as 'association d'entreprises', 'entreprise conjointe', 'co -entreprise' and 'entreprise
commune'. But generally, £
   covers' foreign collaborations. In
Germany,'joint venture' is better represented as a 'combination of companies'
(Konzern)

The venture can be for one specific project only - when the JV is referred more
correctly as a consortium (as the buildin g of the Chunnel) - or a continuing
business relationship. The consortium JV (also known as a cooperative
agreement) is formed where one party seeks technological expertise or technical
service arrangements, franchise and brand use agreements, management
contracts, rental agreements, for µ¶one -time¶¶ contracts. The JV is dissolved
when that goal is reached.

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[c àeducing 'entry' risks by using the local partner's assets
[c Inadequate knowledge of local institutional or legal environment
[c Access to local borrowing powers
[c 'erception that the goodwill of the local partner is carried forward
[c In £

 sectors, the county's laws may not permit foreign nationals to
operate alone
[c Access to local resources through participation of national partner
[c Influence of local partners on government officials or 'compulsory'
requisite (see china coverage below)
[c Access by one partner to r 
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consideration of local parties (or through government incentives for the
mechanism)
[c Again, through government incentives, job and skill growth through
foreign investment, and
[c Incoming r 
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[c Airtel (India) + Zainu 

 (2010)
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[c Airport Authority of India + Fraport AG Frankfurt Airport Services
Worldwide + Delhi International Airport + GMà Group|GMà Infrastructure
+ GMà Group |GMà Energy Ltd + GVL Investments 'vt. Ltd + Malaysia
Airportsu



£ 'rivate Limited + India Development Fund
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(Air France + KLM)
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 (Dow Chemical Company + Corning Incorporated)
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£ (AMD + Advanced Technology Investment Co. (ATIC))
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[c  (NBC Universal + Fox Entertainment Group + ABC, Inc.)
[c INTO University 'artnerships specialises in creating JVs with British
universities
[c Hochtief + Bahrain International Airport
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£c—  £ (LG + 'hilips)
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(Warner Bros. + the Chris-Craft group of independent stations.)
[c àeliance 'etrochemicals + Atlas Energy (Canada)) (2010)
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|China International Trust and Investment Corp

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[c 'rovide companies with the opportunity to gain new capacity and expertise
[c Allow companies to enter related businesses or new geographic markets or
gain new technological knowledge
[c access to greater resources, including specialised staff and technology
[c sharing of risks with a venture partner
[c Joint ventures can be flexible. For example, a joint venture can have a limited
life span and only cover part of what you do, thus limiting both your
commitment and the business' exposure.
[c In the era of divestiture and consolidation, JV¶s offer a creative way for
companies to exit from non-core businesses.
[c Companies can gradually separate a business from the rest of the
organisation, and eventually, sell it to the other parent company. àoughly
80% of all joint ventures end in a sale by one p artner to the other.

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[c It takes time and effort to build the right relationship and partnering with
another business can be challenging. 'roblems are likely to arise if: c
[c The objectives of the venture are not 100 per cent clear and communicated to
everyone involved.
[c There is an imbalance in levels of expertise, investment or assets brought into
the venture by the different partners.
[c Different cultures and management styles result in poor integration and co -
operation.
[c The partners don't provide enough leadership and support in the early stages.
[c Success in a joint venture depends on thorough research and analysis of the
objectives.
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[c Businesses should not engage in joint ventures without adequate planning
and strategy. They cannot afford to, since the ultimate goal of joint ventures
is the same as it is for any type of business operation: to make a profit for the
owners and shareholders. A successful company in any type of business is
often recruited heavily for participation in joint ventures. Thus, they can pick
and choose in which partnerships they would like to engage, if any. They
follow certain ground rules, which have been develo ped over they years as
joint ventures have grown in popularity.
[c For example, experience dictates that both parties in a joint venture should
know exactly what they wish to derive from their partnership. There must be
an agreement before the partnership be comes a reality. There must also be a
firm commitment on the part of each member. One of the leading causes for
the failure of joint ventures is that some participants do not reveal their true
intentions in the partnerships. For example, some private compa nies in
advanced countries have formed partnerships with militant governments to
supply technological expertise and develop products such as chemicals or
nuclear reactors to be used for allegedly peaceful purposes. They learned
later that the products were used for military purposes. Such results can be
detrimental to the companies involved and adversely affect their bottom lines
and reputations, to speak nothing of the direct victims of the military
development.
[c Businesses should form joint ventures with experienced partners. If the
partners do not have approximately equal experience, one can take advantage
of the other, which can lead to failure. Joint ventures generally do not survive
under this imbalanced dynamic. Nor do they survive if companies jump i nto
them without testing the partnership first.
[c 'artners in joint ventures would often be better off participating in small
projects as a way to test one another instead of launching into one large
enterprise without an adequate feeling-out process. This is especially true
when companies with different structures, corporate cultures, and strategic
plans work together. Such differences are difficult to overcome and
frequently lead to failure. That is why a "courtship" is beneficial to joint
venture participants.

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[c Among the most significant benefits derived from joint ventures is that
partners save money and reduce their risks through capital and resource
sharing. Joint ventures give smaller companies the chance to work with
larger ones to develop, manufacture, and market new products. They also
give companies of all sizes the opportunity to increase sales, gain access to
wider markets, and enhance technological capabilities through research and
development c(à D) underwritten by more than one party. In fact, funding
for à D today is often provided by government agencies in a myriad of
countries operating under all types of economies, r anging from capitalist to
socialist and hybrid. This is particularly true in the United States.
[c Until recently, U.S. companies were reluctant to engage in research and
development partnerships, and government agencies tried not to become
involved in business development. However, with the emergence of countries
that feature technologically advanced industries (such as electronics or
computer microchips) supported extensively by government funding,
American companies have become more willing to participate in joint
ventures. Likewise, the U.S. government, along with state governments, has
become more generous with its financial support.
[c Government's increased involvement in the private business environment has
created more opportunities for companies to eng age in domestic and
international joint ventures, although they are still legally limited in what
they can do and where they can operate. Nonetheless, more and more
companies are involving themselves in joint ventures, and the trend is to
increase their participation, since the advantages outweigh the disadvantages.

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[c It is almost certain that the number of joint ventures will continue to increase
in the near future. More and more companies are adopting the joint venture
approach as a part of their growth strategies, particularly in the international
arena. Foreign companies can benefit mutually by combining their
technological and monetary resources and taking advantage of respective
market conditions. Thus, international joint ventures are becoming the norm
rather than the exception ²and in more industries than ever before.
[c Joint ventures may grow in importance so much in the next few years that
many companies could lose their national identities. There could be a growth
in the activities of multinational corporations to the point where joint
ventures will be virtually unrecognizable. In fact, some companies, especially
those in capital-intensive industries, have already lost sight of the fact that
they engage constantly in j oint ventures because they have become so
commonplace.
[c Finally, the wave of privatization, on a global scale, of state -owned industries
and enterprises promised an added catapult for joint venture formations. The
estimated worth of world-wide state-owned industry sales in 1995 reached
$65 billion. This trend will make investment and inroads by companies into
previously closed, and still relatively unfamiliar and structurally adverse,
countries such as China and the former eastern bloc nations increasingly
attractive.

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[c The parties involved
[c The objectives of the joint venture
[c Financial contributions you will each make whether you will transfer any
assets or employees to the joint venture
[c Intellectual property developed by the participants in the joint venture
[c Day to day management of finances, responsibilities and processes to be
followed.
[c Dispute resolution, how any disagreements between the parties will be
resolved
[c How if necessary the joint venture can be terminated.
[c The use of confidentiality or non-disclosure agreements is also recommended
to protect the parties when disclosing sensitive commercial secrets or
confidential information.