proached cautiously. Still, developing country markets are becoming much more open to international competition, thereby providing both opportunities and dangers for domestic companies (Miller et. al., 2000).
In every case, establishing a joint venture can be a challenging enterprise due to the often uncertain legal status of such a strategic alliance, whether formed between corporations all resident within a developed country or when formed between corporations who reside in both developed and developing countries. To ensure the success of such a venture, each corporation must be motivated. Joint ventures have a reputation for instability and failure, particularly when one corporation in a developed country partners with another in a developing country to form the joint venture. For example, one research surveyed 37 international joint ventures to find that participants rated 36 percent of them as having performed unsatisfactorily (Miller et. al., 2000). In another study by the IFC, the percentage of success was higher, but even in that case 27 percent of participants estimated that the joint venture would not eventually continue in its present form (Miller et. al., 2000).
There is no definitive statutory definition of a joint venture (Tate, 1998, p. 62). In fact, the term joint venture is often used to describe many types of business relationships between two or more organizations including, outsourcing arrangements, technology transfers and marketing agreements. However, such relationships would be more accurately characterized as strategic business alliances rather than joint ventures per se. A joint venture differs from such alliances because it is a completely separate business entity created by two or more companies to achieve mutually agreed-upon goals (Miller et. al., 2000). Thus, although like many business alliances a joint venture requires capital commitments from each partner, the joint venture is actually...