Strategic alliances between corporations are growing at unprecedented rates around the world. In many cases, corporations are choosing to work together more closely both to strengthen their competitive position in their own domestic market as well as to strengthen their position or even expand in international business (Donckels & Lambrecht, 1995, p. 11). The reality of global competition today is that few corporations possess all of the competitive advantages necessary to enable them to be successful internationally. In particular, corporations in developed countries see prospects for future growth increasingly within developing countries rather than in their own more familiar markets (Miller et al., 2000). Consequently, many corporations in developed nations are choosing to engage in joint ventures with corporations or other entrepreneurs in developing nations to solidify and expand their global market share.
Joint ventures are loosely defined as a common project between legally and commercially independent companies in which the parties jointly bear both the responsibility for management and the financial risk (Miller et. al., 2000). Increasingly, the formation of joint ventures worldwide has resulted, in part, from the need to gain access to new consumer markets. The formation of a joint venture represents a complicated process whereby corporations must identify their own strengths and weaknesses and set clear strategic directions in an attempt to match their goals and motivations with those of another company (Miller et. al., 2000). In many cases, forming a joint venture with a local company resident in a developing country may be the only entree for an American or Western European business (The Internal Auditor, 1998, p. 52). However, for numerous reasons, doing business in a developing country is often considered far riskier than doing business in a developed nation. Consequently, such business enterprises must be ap...