Just about Joint Ventures


Joint ventures (JV) are the waves of the future. There is hardly a Fortune 500 company, active overseas, that does not have at least one JV.

JV represents a higher risk alternative because it requires various levels of direct investment.  A JV involves sharing risks to accomplish mutual enterprise. JVs, incidentally, are the next most common form of entry once a firm moves beyond the exporting stage to a more regular overseas involvement.

JVs provide a mutually beneficial alternative to domestic and foreign businesses to join forces. For both parties, the ventures are a means to share both capital and risk and make use of each other’s technical strength.

JVs, however, are not an unmixed blessing. The major problem in managining joint ventures stems from one cause: there is more than one partner. With patience and flexibility on the part of both partners, JVs can be managed successfully. But one of the partners must play the key, dominant role to steer the business to success.

Widespread interest in JVs is related to:

  1. Seeking market opportunities.
  2. Dealing with rising economic nationalism.
  3. Preempting raw materials.
  4. Risk sharing.
  5. Developing an export base.
  6. Selling technology.

Even a JV with a well-qualified majority foreign partner may provide significant advantages, such as:

  1. Participation in income and growth.
  2. Low cash requirements.
  3. Preferred treatment for the venture.
  4. Easier access to a market and to market information.
  5. Less drain on a company’s managerial resources.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Revisiting Leadership


Human beings are designed for learning. Unfortunately, the primary institutions of a society are oriented predominantly toward controlling rather than learning, rewarding individuals for performing for others rather than for cultivating their natural curiosity and impulse to learn. The young child entering school discovers quickly that the name of the game is getting the right answer and avoiding mistakes—a mandate no less compelling to the aspiring managers.

 

Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-esteem, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers—grades in school, gold stars, and on up through the university. On the job, people, teams, divisions are ranked—reward for the one at the top, punishment at the bottom. Incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.

 

Ironically, by focusing on performing for someone else’s approval, corporations create the very conditions that predestine them to mediocre performance. Over the long run, superior performance depends on superior learning. A full one-third of the Fortune 500 industrials listed in 1970 had vanished by 1983.

 

Today, the average lifetime of the largest industrial enterprises is probably less than half the average lifetime of a person in an industrial society. On the other hand, a small number of companies that survived for seventy-five years or longer. Interestingly, the key to their survival is the ability to run experiments in the margin to continually explore new business and organizational opportunities that create potential new sources of growth.

 

If anything, the need for understanding how organizations learn and accelerating that learning is greater today than ever before. In an increasingly dynamic, interdependent, and unpredictable world, it is simply no longer possible for anyone to figure it all out at the top. The old model, the top thinks and the local acts, must now give way to integrating thinking and acting at all levels.

 

While the challenge is great, so is the potential payoff. The person who figures out how to harness the collective genius of the people in his/her organization is going to blow the competition way.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight