Tuesday, October 8, 2019

Identify and briefly explain the possible configurations of joint Essay

Identify and briefly explain the possible configurations of joint venture. What are the advantages and disadvantages of the join - Essay Example Countries like China, which opposed globalization once, became strong supporters of globalization at present. No country can develop properly with the help of domestic resources alone. The above truth was realised by the countries only after the entry of globalization. Today, countries are competing in attracting foreign direct investments. It is easy for the organizations to enter a foreign soil at present. Merger, acquisition, strategic alliances, Joint venture etc are some of the major mode of entry adopted by organizations. Joint venture is â€Å"a contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise† (Joint Venture, n. d). Joint venture is an alliance of two or more companies or individuals. The parties involved in joint venture will utilize their skills, expertise, resources etc to carry out the objectives, visions and missions of t he enterprise they formed under the label of joint venture. In joint venture agreements both the parties exercise control over the enterprise and all the assets, revenues and expenses. This paper analyses the structure of joint venture alliances and the advantages and disadvantages of joint venture as a mode of entry. ... The legal status of a corporation is clear, and its ability to own assets, incur liabilities and enter into legally binding contracts is obvious to third parties. The liability of shareholders for the corporation’s debts and obligations is limited to their capital investment in the corporation, something that is not always the case with other entities (Vaughan, 2010) Corporations operate strictly in accordance with the corporate law. The corporate laws can be different in different countries. The joint venture corporations should obey the corporate laws of the country in which the corporation is registered. For example, Dubai Internet City and Kerala (one of the Indian states) recently formed a corporation called smart city in order to do IT business in Kochi. There were lots of controversies before the formation of this corporation. Dubai Internet City insisted some demands about the ownership of the land provided to them by the Kerala government. They asked for total control (Including selling right) over some portions of the land allocated to them by the Kerala government. â€Å"The main barrier that caused postponement of the smart city Kochi project was the conflicts about the free hold rights for 12 percent land of 30 acres which demanded by Dubai based promoters†(Kochi smart city new agreement details, 2011). However, the Kerala government insisted that it is impossible to give outright ownership of the land as per the existing laws in India. Finally, Dubai Internet City forced to give up their arguments. General partnership is another structure of joint venture mode of entry. In this case all the members in the partnership agreement may have personal liability for all the obligations performances of the enterprise

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