A Review of Literature on How to Manage International Joint Venture - 2

A of on How to Manage International Joint Venture Successfully - Literature review Example In licensing model, companies planning for internationalization use patent or trademark of market leaders in foreign countries in order to enter in the country. Companies use strategic partnership with existing player in foreign market in order to enter in the country and this partnership is known as joint venture. Ownership ratio in Joint Venture or International Joint Venture is decided in accordance with the capital invested by two strategic partners. Discussion Academic scholars like Griffith, O’Brian and Zeybek (2001) have pointed out that international joint venture (IJV) is one kind of foreign direct investment and they have also argued that in international joint venture (IJV) strategic partners are engaged to develop and operate one common business entity. Other researchers such as Perlmutter and Heenan (1986) have depicted IJV as a functional device to survive in tumultuous global economies. According to these research scholars companies plan for IJV in order to decr ease financial and strategic risks and they have also given evidences to support their viewpoints. Various research scholars such as Gundlach & Achrolhave (1993) have identified different benefits of forming in IJV. According to them IJV provides various benefits like local capital, raw material sources, marketing capabilities, government assistance, technology integration, tax incentives, assurances of imports, decreasing ethnocentrism issues and local currency loans to foreign players. Academic scholars like Reurer and Miller (1997) have pointed out that IJV can help the parent companies to adopt long term performance plans in order to increase average rate of return in investment. Baek, Min and Ryu (2006) have established a valid argument on wealth management issues of IJV and according to the scholar IJV can create more wealth for shareholders of parent firms meanwhile the model also saves skin for parent firms suffering from high leverage or low level of cash flow. Research sch olars such as Koh and Venkatraman (1991) have argued that international joint venture can boost the growth of stock market value for parent company while many other researchers have found that their argument lacks subjectivity. There is negative side of IJV and academic scholars have pointed out that IJV is considered as strategic dilemma for many organizations. Research scholars such as Yan and Zeng (1999) have pointed out that IJV destabilize the business process for many organizations. They have found that stability of IJV model demands change in leadership or ownership model for companies. Academic scholars have pointed out that IJV needs successful integration of strategic change management in order to be successful. Synchronization of change management and IJV is a contingent option for directing the equilibrium of foreign business venture in response to external and internal forces. Study shows that IJV is the systematic profiling of business risk and available strategic vari ables. Research scholars like Eisenhardt (1989) has proposed two theories names as team production theory and agency theory in order to define risk factors associated with IJV model. Agency theory has underlined agents might fail to understand business objective of principle and in such cases objective of IJV might fail. In such cases principals or the parent companies need to use different mechanisms such as monitoring, contract and reliance in order to resolve agency

Commentery Thesis Example | Topics and Well Written Essays - 500 words

Commentery - Thesis Example The king was then considered to be the guardian of the country and the rise of the parliament was obstructed for a very long time as a result of this theory of the Divine-Right of the king. The powers of the king and the institution of monarchy in England and other parts of Europe have been extremely pronounced and have maintained a strong hold on the public imagination. The king often worked in conjunction with religious authorities of the day so as to maintain monarchical control over the kingdom and over the minds of the people. Through the ages, the institution of monarchy sought to perpetuate itself through discourses that brought in several ideas such as the divine and the social. There have been occasions on which this dissent has translated itself into great violence. One of the greatest instances of this is the execution of the king in England in the seventeenth century by the Puritan regime. The French revolution can be considered to be the culmination of the bourgeoisie so ciety’s resistance against monarchy (New Tensions in the Western Political Tradition: Absolutism and Parliament 23-4). The French revolution then can be considered to be one of the most important moments in the history of Europe where the ideas of liberty, equality and fraternity were considered. These then influenced to a great extent the rise of democracy and the state as an institution of the modern society. The Divine Right theories that were talked of during the medieval ages were then looked upon as something that prevented the transfer of power into the hands of the common people. As explained earlier, the French Revolution led to the displacement of the ideals of monarchy. The importance of this lies in the fact that the overthrow of monarchy was accompanied by a great many changes in the social structures of that period. The complicity of the church in the control that was exercised