Joint Venture Assignment Help

Joint Venture Assignment Help

The concept of joint venturing involves the arrangement where two or more individuals or parties join their resources for the purpose of achieving a particular and common goal or objective. In this regard, each of the parties or individuals perform individual functions and operations, which are in turn essential for the purpose of conducting their joint operations to achieve common goals and objectives. Furthermore, it is also important to observe that there are certain important factors that determine if an arrangement may be considered as being a joint venture. These factors can be identified to include the element of a joint ownership of the operations or project which is being undertaken by the concerned individuals or parties. In addition to this, it is also essential to express an agreement that will be followed by all the parties that are engaged in the supposed joint venture. Each and every mandate in the agreement is required to be followed by the individual members associated within the scope of the joint venture.

Joint Venture in Business

Within the scope of business organizations, joint venture is identified to be a method of growing business operations with the help of an arrangement formed between two or more business entities. In this regard, joint venturing can be described as an arrangement wherein two or more entities or parties agree to gather and utilize the resources available to them for the purpose of accomplishing specific strategic goals and objectives. Consequently, it may also be mentioned that during the formation of such an arrangement, the involved members or entities may invest their resources in an existing project or develop a new project that will help them to obtain their individual as well as collective goals and objectives. One of the most essential elements that may be noted in terms of the operations of joint venture involves that responsibility or accountability of the members involved may be equal or as deemed in the agreement between the parties. However, the profits, losses and other business outcomes that may emerge from the joint venture is a responsibility that is borne by all the involved members in the joint venture. The formation of joint ventures enable the involved business organizations to be able to leverage the acquisition and utilization of the resources that are available to them. In addition to this, the framework of a joint venture, as adopted by business organizations also enable each of the involved members to save their costs of operations. It is so because the investment that is made for the purpose of conducting the business activities and operations are shared by the involved members within the scope of the joint venture.

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How does Joint Venture Work?

Joint ventures operate in a system where each of the involved individuals or entities enter into an agreement with one another regarding their contribution in the project and thereby the extent to which each of their individual interests will be fulfilled. In addition to this, there is another consideration that is necessitated within the arrangement made among members entering a joint venture, that is, legal liability towards one another. Therefore, it may be identified that joint ventures work with the help of carefully and particularly structured agreements, taking into consideration all the essential aspects that may be required to be covered for the smooth operation of the project. In this regard, it may also be observed that legal obligations, sharing of resources as well as that of losses and profits are required to be maintained by each of the entities engaging in a joint venture.

Examples of Joint Venture

There are various kinds of joint ventures that may be developed within the scope of business organizations or entities. These joint ventures may be identified to include the types of equity joint ventures, cooperative joint ventures, wholly foreign owned joint ventures (WFOEs), foreign investment companies that are limited by shares (FICLBS) and investment companies by investors that are foreign (ICFI). Examples of joint ventures that have been observed over time include Google as the parent company and the pharmaceutical company Glaxo and Smith, Uber and the manufacturer of heavy vehicles Volvo, Sony and Ericson, NBC Universal Television Group (Comcast) with Disney ABC Television Group. Another example of a joint venture includes that between Kellogg and Wilmar International Limited.

Advantages and Disadvantages of Joint Venture

The arrangement of joint ventures among two or more business organizations or entities have several advantages. These advantages may be identified to include the following:

• Better access to a wider range of resources and competencies owing to the arrangement of sharing among the involved members
• Insights and expertise from a talent pool consisting of individuals belonging from different backgrounds and job experiences as a result of the coalition between the engaged members in the joint venture
• Sharing of risks and costs among the involved members in the joint venture prevents each of the involved members to suffer in case of discrepancies in business operations
• Shared responsibility and accountability of the involved members owing to legal obligations by which the members will remain bound in the joint venture

However, on the other hand, there are also several disadvantages of joint ventures, which may be identified to include the following:

• Flexibility and freedom of each of the individual members is restricted as they are bound by clearly structured agreements and legal obligations
• In maximum cases the involved members within the scope of joint venture do not share equal responsibility and risks, which makes some involved members suffer from challenges more than the others
• Joint ventures among international entities may often cause clash of the cultures in terms of the workforce present with each member
• Limitations in the utilization of opportunities as may be available in the market in which the joint venture operates owing to legal obligations and other negative impact of the partner company upon the other stakeholders of the organization