Why International Joint Ventures Fail In today's business world, risk management is key. Some multinational companies choose to fly solo, while others implement a joint venture (JV) to mitigate both visible and invisible risks. Both equity JVs, defined by the resources provided by both parties to facilitate a new company, and contractual alliances, seen by the collaboration of partners without the creation of an existing new company, are attractive formats for companies to offset risk. While the type of JV may be obvious, what is not clear is how to ensure that the implementation of the JV is smooth and hassle-free. While some critics suggest that there are multiple reasons for JV failure, others simply state that the failure is eminent for one main reason, “dual parenting.” Although there is superficial agreement between the parents, the end result is usually indicative of a disagreement between both on most topics. For the most part there are two types of parents with respect to JVs: Dominant Parent: Managed by a primary parent who usually delegates business personnel for the JV. The board of directors dominates as the ceremonial leader, although each parent has executives present. Shared parent: Both parents contribute staff. All managers on both sides share functional decision-making powers. However, other JV critics estimate that nearly 70% of all joint ventures (JVs) fail primarily for three reasons: poor/undefined leadership, cultural differences, and poor integration processes. Furthermore, international joint ventures (IJVs) identify cultural and ideological differences as major factors contributing to JV failure. It is important to note that it does not matter what the differences are between the parent companies; neither of them plans a thorough enough escape… half of the paper… aside. If bilateral parenting skills are guaranteed for the success of the joint venture, regardless of the transfer of unilateral skills, unilateral dominance will occur. If bilateral expertise is critical to the success of the JV, then the JV will be a shared partnership. References:1. James Bamford, David Ernst, David G. Fubini. “Launching a World-Class Joint Venture,” Harvard Business Review, February 2004; http://hbr.org/2004/02/launching-a-world-class-joint-venture/ar/12. Vadim Kotelnikov. “The Most Common Causes of Joint Venture Failure,” http://www.1000ventures.com/business_guide/jv_failure_reasons.html3. International joint venture; http://www2.warwick.ac.uk/alumni/services/eportfolios/bsqjfb/gbs0955773.pdf4. Peter who kills. “How to Make a Global Joint Venture Work,” Harvard Business Review, May 1982; http://hbr.org/1982/05/how-to-make-a-global-joint-venture-work/ar/4