Editorial

15
EDITORIAL

JOINT VENTURES - STRATEGY FOR THE FUTURE?

The words 'Joint Venture' now appear regularly in business journals emanating from all parts of the world. It is especially noticeable, within recent times, appearing in the local print media. The occasional references that occurred during the 1960's, 1970's and 1980's have recently turned into a veritable torrent. This illustrates beyond all reasonable doubt that this type of operation has become an essential part of the businessman's strategic armoury.
Lee Adler, writing in the Harvard Business Review in 1966, took an early view on the practice of joint ventures, describing it as 'symbiotic marketing". This term probably best captures the spirit of a joint venture relationship since the notion conveys an analysis of business activity that goes deeper than mere trade relationships. It concentrates on the deliberate alliance of resources between two or more independent organizations in order to improve their mutual market growth potential.

RATIONALE FOR JOINT VENTURES
The joint venture has a precondition to its existence "clarity of purpose" and this forms one of the prime attractions of such a business tool. Whereas an individual company may have clouded its sense of direction, participation in a joint venture by contrast forces attention to a dominant business purpose. In fact, without clearly spelt out objectives no viable platform exists for negotiations between companies. A joint venture allows the reduction of risk and yields one of the highest rate of return on investment. Given this position of common purpose, the joint venture will almost certainly start off as a superior enterprise.
The economic and social realities of imbalance, reflected by disparities in technological competence and material well-being have become known as the 'North-South' Problem. Developing countries have tended to find that advanced technology is not always appropriate to their overall developmental needs and does not significantly affect job creation or general standards of living. However advanced technology is usually essential for the maintenance and expansion of heavy industries. In this context, technology transfer - both ways - is necessary and should increasingly be centred on the terms by which the technology is acquired and the ends to which it will be used. This will ensure that the technology is both relevant and up to date.

STAFFING
In the context of an international joint venture, the creation of a good quality home support team is an important prerequisite for success. People in the team should be responsive and interested, technically competent and practical problem solvers who get things done.
Good relationships among venture partners are essential for its success, and like reputations, takes months to build and seconds to destroy. To achieve good long term working relationships early thought has to be given to selecting a support team that can build such relationships and win confidence. It is a commonly held belief that 'continuity of personality' is a particularly eastern approach; experience however tends to suggest that it is a universal approach. John Walmsley in his book 'Handbook of International Joint Ventures' had this to say about staffing: is sometimes useful to think through ways and means of achieving a match of spirit between personalities because if demonstrates a willingness to skirt around fringes to serve the relationship. In reality however what is required is staff with the skill and intuition to spot problems before they arise and with the competence and 'clout' in their organization to solve such problems quickly'.
Young and old often make good personality matches founded on mutual respect. It also sometimes seems that if matches is made by status alone, both people and project can suffer.

CONCLUSION
There are a variety of ways and means for tying technology and industrial enterprise to the development process. One of the most appropriate is clearly the joint venture, because it marries together the basic needs and also establishes a joint commitment to change the working environment. In the context of the "North - South" debate two or more partners, at least one local and the other an organization with already developed technical capabilities, can work together for common goals. A joint venture operation might be seen as a deliberate decision to achieve new business strengths without the use of a merger or acquisition strategy. As always a price has to be paid for reducing the risk: in the case of the joint venture the profits are shared with chosen partners.

STEVE GEETAN
Editor

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