Strategic Management:

Strategic Partnerships

Joint Ventures (JVs)

Sharing Capital, Technology, Human Resources, Risks and Rewards


Vadim Kotelnikov personal logo Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Good fences make good neighbors." Robert Frost


"The greatest change in corporate culture and the way business is being conducted may be the accelerated growth of relationships based on partnership." Peter Drucker



Benefits of Joint Ventures2,5

  • Provide companies with the opportunity to obtain new capacity, expertise, and information

  • Allow companies to offer their customers new products and services

  • Allow companies to save money when businesses share operating, advertising and marketing costs

  • Allow companies to save valuable time when businesses share the workload

  • Allow companies to gain new business associates and get referrals from other businesses

  • Allow companies to enter into related businesses or new geographic markets or obtain new technological knowledge

  • Have a relatively short life span (5-7 years) and therefore do not represent a long-term commitment

  • In the era of divesture and consolidation, offer a creative way for companies to exit from non-core businesses: companies can gradually separate a business from the rest of the organization, and ultimately, sell it to the other parent company (appr. 80% of all joint ventures end in a sale by one partner to the other).

Joint Venture Venture Acquisitions Synergy Ten3 Business e-Coach: why, what, and how Joint Venture Mergers and Acquisitions JOINT VENTURE vs ACQUISITION

Three Possible JV Governance Arrangements4

  1. Full equality: the parents decide policy and operating matters together

  2. Policy equality: the parents must concur on JV policy terms, while one takes the lead in operating matters

  3. Lead parent arrangement: one parent has the lead on policy as well as operating questions... More

Common Reasons for Joint Venture Difficulties2

  • The joint venture partners possess disparate, and often conflicting, corporate cultures and operational styles... More


Strategic Business Partnerships

Common Reasons for Joint Venture Difficulties

Causes for Joint Venture Failure

Forming a Successful Joint Venture

Choosing a Joint Venture Governing Structure

Joint Venture Human Resources Strategy

HR Action Steps to Prepare for a Successful JV

Causes for Joint Venture Failure

10 Key Features of Effective Partnerships

Strategic Alliances

Structuring a Strategic Alliance: 10 Questions To Answer

Mergers & Acquisitions

Getting People Issues Right in Mergers and Acquisitions

Building Trust Between Organizations


Harnessing the Power of Diversity


Conduct During Negotiations

Model Agreements and Contracts

A preliminary MoU Between Joint Venture Partners

Joint Venture Agreement: a Checklist

Intellectual Property Management

Licensing of IPR

Effective Management

Venture Management

Managing Cross-Cultural Differences

Culture Dimension Scores of 10 Selected Countries

Cross-Cultural Differences: China and United States

Competitive Advantage: US versus Japan

Russians: Comparative Character Features (a slide show)

Why Joint Ventures?

As there are good business and accounting reasons to create a joint venture (JV) with a company that has complementary capabilities and  resources, such as distribution channels, technology, or finance, joint ventures are becoming an increasingly common way for companies to form strategic alliances. In a joint venture, two or more "parent" companies agree to share capital, technology, human resources, risks and rewards in a formation of a new entity under shared control.

Most Common Causes of Joint Venture Failure

Research indicates that 50 to 70% of all joint ventures fail. Not many CEOs of joint ventures characterized their venture as "very successful".

Cultural and ideological differences top the list. Insufficient planning is also one of the most prevalent reasons for failed joint ventures... More

Choosing a JV Governing Structure

There are three possible JV governance arrangement: full equality; policy equality, and lead parent arrangement... More

Human Resources Strategy1

While joint ventures are driven by business needs and are implemented in accordance with a business plan or strategy which is generally stated in financial terms, it is the responsibility of the human resources function to translate the business plan into "people" terms... More

Preparing for a Successful JV: HR Action Steps

As  Konosuke Matsushita the legendary founder of Panasonic, put it, "Business is people. Business success is achieved by getting each and every person in the organization to be more successful in the job they do.

The Tree of Business Success

Hewitt suggests to take the following human resources (HR) action steps to prepare for a successful joint venture.

  • screening of prospective partners

  • joint development of a detailed business plan and shortlisting a set of prospective partners based on their contribution to developing a business plan

  • due diligence checking the credentials of the other party ("trust and verify" trust the information you receive from from the prospective partner, but it's good business practice to verify the facts through interviews with third parties)

  • development of an exit strategy and terms of dissolution of  the joint venture

  • most appropriate structure (e.g. most joint ventures involving fast growing companies are structured as strategic corporate partnerships)

  • availability of appreciated or depreciated property being contributed to the joint venture; by misunderstanding the significance of appreciated property, companies can fundamentally weaken the economics of the deal for themselves and their partners.

  • special allocations of income, gain, loss or deduction to be made among the partners

  • compensation to the members that provide services... More

Preparing a Business Plan

To maximize the chances of success, the prospective joint venture partners should first jointly prepare and agree on a business plan - even before signing the joint venture agreement.

Wise Agreement

It will enable each party to judge the other's expectations, level of interest, management style and experience. "It is best to include as much details as possible with regard to strategies, policies and methods so that the expectations and preferences of the parties are highlighted and sorted out. The partners should particularly focus on areas where they depend on each other, such as transfer pricing, technology transfer, market restrictions and R&D."3

The business plan should also include the exit strategies, the terms of dissolution of the joint venture, mechanisms to resolve disagreements between the JV partners, contingency plans and the a process to make changes in the business plan in response to the market changes and feedback. It is important to involve the key managerial and operating personnel in development of the business plan as they will best understand the details that need to be negotiated.

Negotiation DOs and DON'Ts

Preparing a Joint Venture Agreement

A good agreement is critical to success of your venture. Once the business plan is finalized, preparing the joint venture agreement becomes much easier. Using a joint venture check-list will also help you prepare a sound joint venture agreement.

Operating an International Joint Venture

Operating a joint venture with a foreign partner requires time, resources, and cross-cultural skills. Cultural intelligence and strategic thinking can be the prescription to avoiding errors in cross-cultural projects.

As your joint venture has to compete in its market for people, customers and capital, its human resource, pricing, service, financial and other policies must be tuned to that market. "The resources you place under the control of JV should be only those that are unique to it needs. To minimize costs, all else should be drawn from your firms or bought from outside."4 It is often tempting to take short cuts because of resources constraints and the need for speed. Nevertheless, if you wish to minimize the risks inherent in an international joint venture, you must manage the processes with great care.

Venture Management

Management of the venture-building process is fundamentally different  from corporate management that is focused on delivering the annual operating plan. Management of a new high-growth business is build around a  customer-driven idea or a technology. It requires entrepreneurial mindset and skills. Being first to the market is the top priority for the venture manager. Your core competence, the ability to move quickly from idea to market, is a key enabler of success... More

 Case in Point  Diamond Associates

"Collaborate," advises Georgann Occhipinti, President of Diamond Associates. "I periodically collaborate with another consulting firm as a way of developing my own. The group is comprised of other consultants and business owners with very diverse backgrounds. We work together a few times a year with specific clients and are able to immediately function as a very effective team. It is a selfless experience in which egos are never an issue and each of us can rely on any other to lend support, solutions, and the latest industry knowledge. Simply put, this continues to be the best team that I have ever worked with, regardless of the member configuration or work content. I always look forward to working with this team, and it always exceeds my expectations. We all engage in complete collaboration from start to finish."


SMART Business Architect (Ten3 Mini-course)


  1. Joint Ventures / Partnerships, Hewitt

  2. Joint Ventures: Minimizing Risk and Maximizing Success, Hewitt

  3. Close Connections, Ranjit Shastri

  4. Trusted Partners, Jordan D. Lewis

  5. Joint Ventures Revealed, PlugInForProfit

  6. Alliances and Acquisitions Increasingly Important For Fast-Growth Companies, Trendsetter Barometer, PricewaterhouseCoopers

  7. Mastering Alliance Strategy: A Comprehensive Guide to Design, Management, and Organization, James D. Bamford, Benjamin Gomes-Casseres, Michael S. Robinson

  8. Strategic Alliances: Three Ways to Make Them Work (Memo to the Ceo), Steve Steinhilber