International joint ventures allow companies to share resources and expertise to enter new markets jointly. They provide benefits like accessing complementary skills, speeding market access, and responding to competition. Companies form IJVs to reduce risks and costs of expanding internationally. National culture influences IJVs in both home and host countries. Cultural differences in areas like decision-making and management styles between partners can lead to challenges in IJV operations if not properly addressed. Understanding these cultural dimensions is important for successful collaboration.

1. International joint ventures

2. International joint ventures
International joint venture is the type of equity-based cross-border
alliance
A joint venture is a contractual business undertaking between two or
more parties. It is similar to a business partnership, with one key
difference: a partnership generally involves an ongoing, long-term
business relationship, whereas a joint venture is based on a single business
transaction.
 Individuals or companies choose to enter joint ventures in order to
share strengths, minimize risks, and increase competitive advantages in
the marketplace

3. International joint ventures and the rational behind their formation
Various theories and models have mentioned that
International joint ventures offers unique benefits of cross –cultural meshing
each organisation ’s complementary skill ,assure or speed up market access
Trans-nationally ,leap-frog the host nation’s technological gaps, and strategically
respond to increasingly intense national and global competition
IJV’s have proliferated because individual companies recognize that expansion
Into new markets can be resource –intensive and risky.
Glaister and buckley identify five major perspectives:
1)Mainstream economics orientation ~ extension of the firm by alliance as a means
to obtain economies of scale
2)The transaction cost approach ~reduction in cost
3)Resource dependence ~to extend the firm’s domain of control through vertical
links and risk sharing
4)Organizational learning ~ transfer of technology and exchange of patent motive
5)Strategic positioning ~ suggest that alliances are formed by desire to shape
competition and consolidate the firm’s market position

4. Joint ventures and national culture
Home country :
Freedom of movement of capital across borders and off-shore ownership is major
influencing factor regarding the decision to enter in alliances with foreign firms
Operating outside one’s own country
 In most liberal-trade nations portfolio and other forms of share-ownership in firms
operating abroad are not hindered by the state, but in protectionist economies the flow
of capital from the domestic market to foreign lands and either severely restricted or not
Permissible at all
Taxation policies makes home country to engage in joint ventures
Acc to Beamish tax advantage in the home country result because in some countries the
monitory ownership is treated as an investment whereas wholly-owned subsidiaries and
majority-owned joint ventures are not.

5. Host country:
host country forms the immediate external environment of IJV’s with which it has
Interact & to whose pressure and expectations it has to respond.
Company undertaking expansion through IJV’s need to understand the significant
elements of local country culture, especially in terms of initial negotiation and partner
selection
IJV’s here mainly falls in to 6 broad categories
1)Legal system
2)Political culture
3)Industrial relation culture
4)Level of economic advancement
5)Membership of global & regional agreement
6)National culture as a whole
Foreign partners in IJV’s voluntary give up some of their managerial prerogative
in HRM area because of local complications

6. Effects of national culture on international joint venture operation
International joint ventures bring together two or more sets of employees whose
national culture gives fundamental difference in views on what constitutes a desirable
management style or approach.
Schoenberg and his colleagues studied major Anglo –French joint ventures from
chemical and engineering sectors which formed between 1986 & 1989.
They compared the two nations on Hofstede’s dimension ,power distance
&uncertainty avoidance.
 In comparison the French management style was widely perceived as being more
autocratic with decision making, authority clearly concentrated at top management
levels. Where British executives were accustomed to leave more discretion to middle
management levels
--The two mgt style were failed in decision making discretion at same organizational
levels
 These kind of cultural clashes show the extent to which we all take our home grown
assumption for granted and expect others to know them and behave accordingly