Creating and Managing International Joint Ventures

By Arch G. Woodside; Robert E. Pitts | Go to book overview

7 Where Have the U.S.-Dutch Joint Ventures Gone? In Search of Dimensions That May Bring Down Untimely Dissolutions

Theo Roebers


U.S.-DUTCH JOINT VENTURES

Within the framework of strategic alliances, the joint venture has no doubt been able to arouse the interest of management and academic literature ( Lyons 1991). This type of partnership has a variety of formats and ways of implementation, and could serve diverse purposes. In essence this alliance involves two or more legally distinct organizations (the parents), each of which actively participates, beyond a mere investment role, in the decision-making activities of the jointly owned entity ( Geringer 1991). An international joint venture is a partnership between an international company (in this study headquartered in the United States) and a firm that (in principle) is native to the country where the venture is located. As this study deals with joint ventures located in the Netherlands, the other parent is a Dutch company.


ADVANTAGES AND DISADVANTAGES OF THE JOINT VENTURE

Reduction of risk can also play a role without considering development projects. This is especially true of ventures that were established more than thirty years ago (e.g. the partnership between Cyanamid and the AKZO subsidiary, Ketjen, that ended in 1989), which began in a period when American partners were anything but sure about the European economic and business future. Financing the whole investment in a local production was avoided by a partnership.

Looking for overseas production facilities, the international company in the present climate prefers to prevent creating capacity and employing new staff if an overseas unit can be found with excess capacity. The owner of that unit is a

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