This document discusses alternative operating modes for international business, including exporting, foreign direct investment, and collaborative arrangements. It defines collaborative arrangements as joint ventures, licensing, franchising, management contracts, and turnkey operations. The document also covers motives for collaboration, types of arrangements, factors for choosing arrangements, and managing international collaborations.
14 Direct Investment and Collaborative StrategiesBrent Weeks
To clarify why companies may need to use modes other than exporting to operate effectively in international business
To comprehend why and how companies make foreign direct investments
To understand the major motives that guide managers when choosing a collaborative arrangement for international business
To define the major types of collaborative arrangements
To describe what companies should consider when entering into international arrangements with other companies
To grasp why collaborative arrangements succeed or fail
To see how companies can manage diverse collaborative arrangements
14 Direct Investment and Collaborative StrategiesBrent Weeks
To clarify why companies may need to use modes other than exporting to operate effectively in international business
To comprehend why and how companies make foreign direct investments
To understand the major motives that guide managers when choosing a collaborative arrangement for international business
To define the major types of collaborative arrangements
To describe what companies should consider when entering into international arrangements with other companies
To grasp why collaborative arrangements succeed or fail
To see how companies can manage diverse collaborative arrangements
To grasp company strategies for sequencing the penetration of countries
To see how scanning techniques can help managers both limit geographic alternatives and consider otherwise overlooked areas
To discern the major opportunity and risk variables a company should consider when deciding whether and where to expand abroad
To know the methods and problems of collecting and comparing international information
To understand some simplifying tools for helping decide where to operate
To consider how companies allocate emphasis among the countries where they operate
To comprehend why location decisions do not necessarily compare different countries’ possibilities
11 The Strategy of International BusinessBrent Weeks
To evaluate industry structure, firm strategy, and value creation
To profile the features and functions of the value chain
To assess how managers configure and coordinate a value chain
To explain global integration and local responsiveness
To profile the types of strategies firms use in international business
To examine the broad foundation of ethical behavior
To demonstrate the cultural and legal foundations of ethical behavior
To discuss the importance of social responsibility when operating internationally, especially in the areas of sustainability
To discuss some key issues in the social activities and consequences of globalized business
To examine corporate responses to globalization in the form of codes of conduct, among other things
To explain the rationales for governmental policies that enhance and restrict trade
To show the effects of pressure groups on trade policies
To describe the potential and actual effects of governmental intervention on the free flow of trade
To illustrate the major means by which trade is restricted and regulated
To demonstrate the business uncertainties and business opportunities created by governmental trade policies
15 The Organization of International BusinessBrent Weeks
Profile the evolving process of organizing a company for international business
Describe the features of classical structures
Describe the features of neoclassical structures
Discuss the systems used to coordinate and control international activities
Profile the role and characteristics of organization culture
To introduce the idea of exporting and profile its elements
To introduce the idea of importing and profile its elements
To identify the problems and pitfalls that challenge international traders
To identify the resources and assistance that helps international traders
To discuss the idea of an export plan
To outline the practice of countertrade
01 Globalization and International BusinessBrent Weeks
To define globalization and international business and show how they affect each other
To understand why companies engage in international business and why international business growth has accelerated
To discuss globalization’s future and the major criticisms of globalization
To become familiar with different ways in which a company can accomplish its global objectives
To apply social science disciplines to understanding the differences between international and domestic business
06 International Trade and Factor MobilityBrent Weeks
To understand theories of international trade
To explain how free trade improves global efficiency
To identify factors affecting national trade patterns
To explain why a country’s export capabilities are dynamic
To understand why production factors, especially labor and capital, move internationally
To explain the relationship between foreign trade and international factor mobility
To grasp company strategies for sequencing the penetration of countries
To see how scanning techniques can help managers both limit geographic alternatives and consider otherwise overlooked areas
To discern the major opportunity and risk variables a company should consider when deciding whether and where to expand abroad
To know the methods and problems of collecting and comparing international information
To understand some simplifying tools for helping decide where to operate
To consider how companies allocate emphasis among the countries where they operate
To comprehend why location decisions do not necessarily compare different countries’ possibilities
11 The Strategy of International BusinessBrent Weeks
To evaluate industry structure, firm strategy, and value creation
To profile the features and functions of the value chain
To assess how managers configure and coordinate a value chain
To explain global integration and local responsiveness
To profile the types of strategies firms use in international business
To examine the broad foundation of ethical behavior
To demonstrate the cultural and legal foundations of ethical behavior
To discuss the importance of social responsibility when operating internationally, especially in the areas of sustainability
To discuss some key issues in the social activities and consequences of globalized business
To examine corporate responses to globalization in the form of codes of conduct, among other things
To explain the rationales for governmental policies that enhance and restrict trade
To show the effects of pressure groups on trade policies
To describe the potential and actual effects of governmental intervention on the free flow of trade
To illustrate the major means by which trade is restricted and regulated
To demonstrate the business uncertainties and business opportunities created by governmental trade policies
15 The Organization of International BusinessBrent Weeks
Profile the evolving process of organizing a company for international business
Describe the features of classical structures
Describe the features of neoclassical structures
Discuss the systems used to coordinate and control international activities
Profile the role and characteristics of organization culture
To introduce the idea of exporting and profile its elements
To introduce the idea of importing and profile its elements
To identify the problems and pitfalls that challenge international traders
To identify the resources and assistance that helps international traders
To discuss the idea of an export plan
To outline the practice of countertrade
01 Globalization and International BusinessBrent Weeks
To define globalization and international business and show how they affect each other
To understand why companies engage in international business and why international business growth has accelerated
To discuss globalization’s future and the major criticisms of globalization
To become familiar with different ways in which a company can accomplish its global objectives
To apply social science disciplines to understanding the differences between international and domestic business
06 International Trade and Factor MobilityBrent Weeks
To understand theories of international trade
To explain how free trade improves global efficiency
To identify factors affecting national trade patterns
To explain why a country’s export capabilities are dynamic
To understand why production factors, especially labor and capital, move internationally
To explain the relationship between foreign trade and international factor mobility
To describe the International Monetary Fund and its role in the determination of exchange rates
To discuss the major exchange-rate arrangements that countries use
To explain how the European Monetary System works and how the euro became the currency of the euro zone
To identify the major determinants of exchange rates
To show how managers try to forecast exchange-rate movements
To explain how exchange rate movements influence business decisions
04 The Economic Environments Facing BusinessBrent Weeks
To communicate the importance of economic analysis
To discuss the idea of economic freedom
To profile the characteristics of the types of economic systems
To introduce the notion of state capitalism
To profile indicators of economic development, performance, and potential
To learn the fundamentals of foreign exchange
To identify the major characteristics of the foreign-exchange market and how governments control the flow of currencies across national borders
To describe how the foreign-exchange market works
To examine the different institutions that deal in foreign exchange
To understand why companies deal in foreign exchange
08 Cross-National Cooperation and AgreementsBrent Weeks
To identify the major characteristics and challenges of the World Trade Organization
To discuss the pros and cons of global, bilateral, and regional integration
To describe the static and dynamic impact of trade agreements on trade and investment flows
To define different forms of regional economic integration
To compare and contrast different regional trading groups
To describe other forms of global cooperation such as the United Nations and OPEC
03 The Political and Legal Environments Facing BusinessBrent Weeks
To discuss the philosophy and practices of the political environment
To profile trends in contemporary political systems
To explain the idea of political risk and approaches to managing it
To discuss the philosophy and practices of the legal system
To describe trends in contemporary legal systems
To explain legal issues facing international companies
06-04-2024 - NYC Tech Week - Discussion on Vector Databases, Unstructured Data and AI
Round table discussion of vector databases, unstructured data, ai, big data, real-time, robots and Milvus.
A lively discussion with NJ Gen AI Meetup Lead, Prasad and Procure.FYI's Co-Found
Data Centers - Striving Within A Narrow Range - Research Report - MCG - May 2...pchutichetpong
M Capital Group (“MCG”) expects to see demand and the changing evolution of supply, facilitated through institutional investment rotation out of offices and into work from home (“WFH”), while the ever-expanding need for data storage as global internet usage expands, with experts predicting 5.3 billion users by 2023. These market factors will be underpinned by technological changes, such as progressing cloud services and edge sites, allowing the industry to see strong expected annual growth of 13% over the next 4 years.
Whilst competitive headwinds remain, represented through the recent second bankruptcy filing of Sungard, which blames “COVID-19 and other macroeconomic trends including delayed customer spending decisions, insourcing and reductions in IT spending, energy inflation and reduction in demand for certain services”, the industry has seen key adjustments, where MCG believes that engineering cost management and technological innovation will be paramount to success.
MCG reports that the more favorable market conditions expected over the next few years, helped by the winding down of pandemic restrictions and a hybrid working environment will be driving market momentum forward. The continuous injection of capital by alternative investment firms, as well as the growing infrastructural investment from cloud service providers and social media companies, whose revenues are expected to grow over 3.6x larger by value in 2026, will likely help propel center provision and innovation. These factors paint a promising picture for the industry players that offset rising input costs and adapt to new technologies.
According to M Capital Group: “Specifically, the long-term cost-saving opportunities available from the rise of remote managing will likely aid value growth for the industry. Through margin optimization and further availability of capital for reinvestment, strong players will maintain their competitive foothold, while weaker players exit the market to balance supply and demand.”
Quantitative Data AnalysisReliability Analysis (Cronbach Alpha) Common Method...2023240532
Quantitative data Analysis
Overview
Reliability Analysis (Cronbach Alpha)
Common Method Bias (Harman Single Factor Test)
Frequency Analysis (Demographic)
Descriptive Analysis
Adjusting OpenMP PageRank : SHORT REPORT / NOTESSubhajit Sahu
For massive graphs that fit in RAM, but not in GPU memory, it is possible to take
advantage of a shared memory system with multiple CPUs, each with multiple cores, to
accelerate pagerank computation. If the NUMA architecture of the system is properly taken
into account with good vertex partitioning, the speedup can be significant. To take steps in
this direction, experiments are conducted to implement pagerank in OpenMP using two
different approaches, uniform and hybrid. The uniform approach runs all primitives required
for pagerank in OpenMP mode (with multiple threads). On the other hand, the hybrid
approach runs certain primitives in sequential mode (i.e., sumAt, multiply).
06-04-2024 - NYC Tech Week - Discussion on Vector Databases, Unstructured Data and AI
Discussion on Vector Databases, Unstructured Data and AI
https://www.meetup.com/unstructured-data-meetup-new-york/
This meetup is for people working in unstructured data. Speakers will come present about related topics such as vector databases, LLMs, and managing data at scale. The intended audience of this group includes roles like machine learning engineers, data scientists, data engineers, software engineers, and PMs.This meetup was formerly Milvus Meetup, and is sponsored by Zilliz maintainers of Milvus.
Adjusting primitives for graph : SHORT REPORT / NOTESSubhajit Sahu
Graph algorithms, like PageRank Compressed Sparse Row (CSR) is an adjacency-list based graph representation that is
Multiply with different modes (map)
1. Performance of sequential execution based vs OpenMP based vector multiply.
2. Comparing various launch configs for CUDA based vector multiply.
Sum with different storage types (reduce)
1. Performance of vector element sum using float vs bfloat16 as the storage type.
Sum with different modes (reduce)
1. Performance of sequential execution based vs OpenMP based vector element sum.
2. Performance of memcpy vs in-place based CUDA based vector element sum.
3. Comparing various launch configs for CUDA based vector element sum (memcpy).
4. Comparing various launch configs for CUDA based vector element sum (in-place).
Sum with in-place strategies of CUDA mode (reduce)
1. Comparing various launch configs for CUDA based vector element sum (in-place).
Techniques to optimize the pagerank algorithm usually fall in two categories. One is to try reducing the work per iteration, and the other is to try reducing the number of iterations. These goals are often at odds with one another. Skipping computation on vertices which have already converged has the potential to save iteration time. Skipping in-identical vertices, with the same in-links, helps reduce duplicate computations and thus could help reduce iteration time. Road networks often have chains which can be short-circuited before pagerank computation to improve performance. Final ranks of chain nodes can be easily calculated. This could reduce both the iteration time, and the number of iterations. If a graph has no dangling nodes, pagerank of each strongly connected component can be computed in topological order. This could help reduce the iteration time, no. of iterations, and also enable multi-iteration concurrency in pagerank computation. The combination of all of the above methods is the STICD algorithm. [sticd] For dynamic graphs, unchanged components whose ranks are unaffected can be skipped altogether.
Chatty Kathy - UNC Bootcamp Final Project Presentation - Final Version - 5.23...John Andrews
SlideShare Description for "Chatty Kathy - UNC Bootcamp Final Project Presentation"
Title: Chatty Kathy: Enhancing Physical Activity Among Older Adults
Description:
Discover how Chatty Kathy, an innovative project developed at the UNC Bootcamp, aims to tackle the challenge of low physical activity among older adults. Our AI-driven solution uses peer interaction to boost and sustain exercise levels, significantly improving health outcomes. This presentation covers our problem statement, the rationale behind Chatty Kathy, synthetic data and persona creation, model performance metrics, a visual demonstration of the project, and potential future developments. Join us for an insightful Q&A session to explore the potential of this groundbreaking project.
Project Team: Jay Requarth, Jana Avery, John Andrews, Dr. Dick Davis II, Nee Buntoum, Nam Yeongjin & Mat Nicholas
Although companies may have products or services that consumers abroad would like to buy, producing them within their home markets may be too expensive, especially if other companies can make reasonably similar substitutes abroad at a lower cost.
Transportation raises costs so much that it becomes impractical to export some products. Moreover, the higher the transportation costs relative to production costs, the more difficult for companies to develop viable export markets. For example, the international transportation cost for a soft drink is a high percentage of the manufacturing cost, so a sales price that includes both the manufacturing and transportation costs would be so high by exporting that soft-drink companies would sell little. As long as a company has excess capacity, it may compete effectively in export markets despite high transport costs.
Thus Excess capacity:
• Usually leads to exporting rather than new direct investment
• May lead to competitive exports because of variable cost pricing
The more that products must be altered for foreign markets, the more likely that some production will shift to foreign markets. Whirlpool, for example, finds that most U.S. demand is for top-loading washing machines with large capacity using 110 electrical voltage, but most European demand is for front-loading washing machines (more efficient in using energy and water) with smaller capacity using 220 voltage. Given the differences in product preferences, Whirlpool produces in both the United States and Europe.
Although governments have been reducing import barriers, they still restrict many imports. Thus companies may find that they must produce in a foreign country if they are to sell there. For example, Volkswagen decided to build its Skoda models in India because of India’s 121 percent duty on the imports.
Consumers sometimes prefer domestically produced goods because of:
• Nationalism
• A belief that these products are better
• A fear that foreign-made goods may not be delivered on time
For direct investment to take place, control must accompany the investment. Otherwise, it is a portfolio investment. If ownership is widely dispersed, then a small percentage of the holdings may be sufficient to establish control of managerial decision making. Generally, the more ownership a company has, the greater is its control over the decisions. However, governments often protect minority owners so that majority owners do not act against their interests.
Internalization is control through self-handling of operations. This concept comes from transactions cost theory, which holds that companies should seek the lower cost between handling something internally and contracting another party to handle it for them.
Self-handling may reduce costs for the following reasons:
1. Different operating units within the same company are likely to share a common corporate culture, which expedites communications.
2. The company can use its own managers, who understand and are committed to carrying out its objectives.
3. The company can avoid protracted negotiations with another company on such matters as how each will be compensated for contributions.
4. The company can avoid possible problems with enforcing an agreement.
The idea of denying rivals access to resources is called the appropriability theory. Companies are reluctant to transfer vital resources—capital, patents, trademarks, and management know-how—to another organization. The organization receiving these resources may be able to use them to undermine the competitive position of the foreign company transferring them.
Freedom to pursue global strategy:
When a company has a wholly owned foreign operation, it may more easily have that operation participate in a global strategy. For example, if a U.S. company owned 100 percent of its Brazilian operation, it might be able to take actions that, although suboptimizing Brazilian performance, could deal more effectively with actual or potential competitors and customers globally—such as decreasing prices to an industrial customer in Brazil to gain that customer’s business in Germany. Or it might standardize its product to gain global cost savings even though this might result in some lost sales within Brazil. But if the company shared ownership in Brazil, either action might be detrimental to the other owners in Brazil, who would balk at such practices.
How to make FDI:
Buying: Direct investment by acquisition
The advantages of acquiring an existing operation include:
• Adding no further capacity to the market
• Avoiding start-up problems
• Easier financing at times
Greenfield Investments:
Companies may choose to build if:
• No desired company is available for acquisition
• Acquisition will lead to carryover problems
• Acquisition is harder to finance
To produce or sell abroad, a company must incur certain fixed costs. At a small volume of business, it may be cheaper for it to contract the work to a specialist rather than handle it internally. A specialist can spread the fixed costs to more than one company. If business increases enough, the contracting company may then be able to handle the business more cheaply itself.
The resource-based view of the firm holds that each company has a unique combination of competencies. A company may seek to improve its performance by concentrating on those activities that best fit its competencies, depending on other firms to supply it with products, services, or support activities for which it has lesser competency. This concentration may be considered as horizontal or vertical.
Sometimes markets are not large enough to hold many competitors. Companies may then band together so as not to compete. For example, approximately 30 communications carriers, including GTE, MCI, AT&T, and Cable and Wireless, teamed up to form New World, a broadband fiber-optic network connecting the United States with Latin America and the Caribbean. There are potential cost savings and supply assurances from vertical integration. However, both small and large companies may lack the competence or resources necessary to own and manage the full value chain of activities. For example, a study of small and medium-sized Argentine furniture manufacturers showed that they gained manufacturing efficiencies and better access to global markets through vertical alliances.
Many companies pursue collaborative arrangements to learn about a partner’s technology, operating methods, or home market so that their own competencies will broaden or deepen, making them more competitive in the future.
Cultural, political, competitive, and economic differences among countries create barriers for companies abroad. When they feel ill equipped to handle these differences, they may seek collaboration with local companies who will help them. For example, Wal-Mart first tried to enter the Japanese market on its own but gave up after having disappointing sales. It has since returned with a Japanese partner, Seiyu, which is more familiar with Japanese tastes and rules for opening new stores.
Virtually all countries limit foreign ownership in some sectors. India and Russia are examples of countries that are particularly restrictive in that they set maximum foreign percentage ownership in an array of industries. In addition, they usually require lengthy negotiations with governmental authorities to determine the terms of operations, and a savvy local partner can help the foreign investor. Thus companies may have to collaborate if they are to serve certain foreign markets.
Many countries provide little de facto protection for intellectual property rights such as trademarks, patents, and copyrights unless authorities are prodded consistently. To prevent pirating of these proprietary assets, companies sometimes have made collaborative agreements with local companies, which then monitor so that no one else uses the asset locally.
For a company wishing to pursue a geographic diversification strategy, collaborative arrangements offer a faster initial means of entering multiple markets because other companies contribute resources. However, collaborative arrangements will be less appealing for companies whose activities are already widely extended or for those that have ample resources for such extension.
The higher managers perceive the risk in a foreign market, the greater their desire to form collaborative arrangements in that market. Companies worry that political or economic changes will affect the safety of assets and their earnings in their foreign operations. One way to minimize loss from foreign political occurrences is to minimize the base of assets located abroad—or share them. A government may be less willing to move against a
shared operation for fear of encountering opposition from more than one company.
The more a company depends on collaboration, the more likely it is to lose decision-making control, such as on quality, new-product directions, and how much to expand. This is because each partner favors its own performance over that of the company network involved, which necessitates compromises. Collaboration also implies sharing revenues and knowledge—an important consideration when profit potentials are high and when information sharing might increase a potential competition. Thus, loss of control over flexibility, revenues, and competition is an important consideration guiding a company’s selection of forms of foreign operation.
When a company already has operations (especially wholly owned ones) in place in a foreign country, some of the advantages of collaboration are no longer as important. The company knows how to operate within the foreign country and may have excess plant or human resource capacity it can use for new production or sales.
Licensing often has an economic motive, such as the desire for faster start-up, lower costs, or access to additional resources.
The amount and type of payment for licensing arrangements vary, as each contract is negotiated on its own merits.
Companies commonly negotiate a “front-end” payment to cover technology transfer costs. Licensors of technology do this because usually more is involved than simply transferring explicit knowledge, such as through publications and reports. The move requires the transfer of tacit knowledge, such as through engineering, consultation, and adaptation, and these face-to-face interactions incur costs. The licensee usually bears the transfer costs so that the licensor is motivated to ensure a smooth adaptation. Of course, the license of some assets, such as copyrights or brand names, has much lower transfer costs.
Technology may be old or new, obsolete, or still in use at home when a company licenses it. Many companies transfer technology at an early or even a developmental stage so products hit different markets simultaneously. This simultaneous market entry is important when selling to the same industrial customers in different countries and when global advertising campaigns can be effective. Although we think of licensing agreements as collaborative
arrangements among unassociated companies, licensing is also common between parents and their wholly and partially owned operations abroad. One reason is that operations in a foreign country, even if 100 percent owned by the parent, are usually subsidiaries, which are legally separate companies.
A franchisor may penetrate a foreign country by dealing directly with individual franchisees or by setting up a master franchise and giving that organization the rights to open outlets on its own or develop subfranchisees in the country or region. In the latter case, subfranchisees pay royalties to the master franchisee, which then remits some predetermined percentage to the franchisor.
Finding suppliers can add difficulties and expense for food franchisors. For example, McDonald’s had to build a plant to make hamburger buns in the United Kingdom, and it had to help farmers develop potato production in Thailand.
Success generally depends on three factors: product and service standardization, high identification through promotion, and effective cost controls. A dilemma when operating abroad is that the first of these may be difficult to transfer. For example, standardization is important for food franchising so that consumers know what to expect. But when a company enters a foreign country, the taste preferences may be different. In fact, even regionally within large countries, tastes may differ.
In a foreign management contract, a company transfers management personnel and administrative know-how abroad to assist a company for a fee. Contracts usually cover three to five years, and fixed fees or fees based on volume rather than profits are most common. An organization may pay for managerial assistance when it believes another company can manage its operation more efficiently than it can. The ability to manage more efficiently is most apt to occur because of industry-specific capabilities. With management contracts, the owners and host country get the assistance they want without foreign companies’ control of the operations. In turn, the management company receives income without having to make a capital outlay.
One characteristic that sets the turnkey business apart from most other international business operations is the size of many of the contracts, frequently for hundreds of millions of dollars and into the billions. This means that a few very large companies—such as Bechtel (U.S.), Fluor (U.S.), Skanska (Sweden), and Hochtief (Germany)—account for a significant share of the international market.
The nature of these contracts places importance on hiring executives with top-level contacts abroad, as well as on ceremony and building goodwill, such as opening a facility on a country’s independence day or getting a head of state to inaugurate a facility.
Many turnkey contracts are for construction in remote areas, necessitating massive housing construction and importation of personnel. Projects may involve building an entire infrastructure under the most adverse conditions, such as Bechtel’s complex for Minera Escondida, which is high in the Andes. So turnkey operators must have expertise in hiring workers willing to work in remote areas for extended periods and in transporting and using supplies under very adverse conditions.
Payment for a turnkey operation usually occurs in stages as a project develops. Commonly, 10 to 25 percent comprises the down payment, with another 50 to 65 percent paid as the contract progresses, and the remainder paid once the facility is operating in accordance with the contract. Because currency fluctuations can occur during the long time frame between conception and completion, contracts commonly include price escalation clauses or cost-plus pricing.
Possible Combinations:
• Two companies from the same country joining together in a foreign market
• A foreign company joining with a local company
• Companies from two or more countries establishing a joint venture in a third country
• A private company and a local government forming a joint venture
• A private company joining a government-owned company in a third country
The purpose of the equity ownership is to solidify a collaborating contract, such as a supplier-buyer contract, so that it is more difficult to break—particularly if the ownership is large enough to secure a board membership for the investing company. The more equity a firm puts into a collaborative arrangement, coupled with the fewer partners it takes on, the more control it will have over the foreign operations conducted under the arrangement. Note that non-equity arrangements typically entail at least one and often several partners.
Relative Importance:
One partner may give more management attention to a collaborative arrangement than the other does. If things go wrong, the active partner blames the less active partner for its lack of attention, and the less active partner blames the more active partner for making poor decisions. The difference in attention may be due to the different sizes of partners. For example, if the joint venture is between a large and a small company, the venture comprises a larger portion of operations for the small company than for the large one, so the small company may take more interest in the venture.
Divergent Objectives:
Although companies enter into collaborative arrangements because they have complementary capabilities, their objectives may evolve differently over time. For instance, one partner may want to reinvest earnings for growth and the other may want to receive dividends. One partner may want to expand the product line and sales territory, and the other may see this as competition with its wholly owned operations.
Questions of Control:
Sharing assets with another company may generate confusion over control. When companies license their logos and trademarks for use on products they themselves do not produce, they may lack the ability to discern and control quality. Yet poor quality may affect sales of all products using the brand name and logo.
Comparative Contributions and Appropriations
Partners’ relative capabilities of contributing technology, capital, or some other asset may change over time.
In addition, one partner may suspect that the other is taking more from the operation (particularly knowledge-based assets) than it is, which would enable it to become a competitor. In the face of such suspicions, information may be withheld, which, in time, weakens the operation.
Culture Clashes:
Managers and the companies for which they work are affected by their national cultures, such as in how they evaluate the success of their operations. For example, U.S. companies tend to evaluate performance on the basis of profit, market share, and specific financial benefits. Japanese companies tend to evaluate primarily on how operations help build their strategic positions, particularly by improving their skills.
Differences in Corporate Cultures:
Differences in corporate cultures may create problems within joint ventures. For example, one company may be accustomed to promoting managers from within the organization, whereas the other opens its searches to outsiders. One may use a participatory management style and the other an authoritarian style. One may be entrepreneurial and the other risk averse. Thus, many companies develop joint ventures only after they have had long-term positive experiences with the other company, such as through distributorship or licensing arrangements.
Companies’ capabilities may change over time and influence the form of operations undertaken. For example, collaboration provides a company the opportunity to learn from its partner, enabling it to make a deeper commitment confidently. However, the cost of switching from one form to another—for example, from licensing to wholly owned facilities—may be high because of possibly having to pay contractual termination fees to another company.
Tension may develop internally as a company’s form of international operations changes, because individuals may gain or lose responsibilities. The people who then end up with less responsibility may be disadvantaged if bonuses and promotions are based largely on the size of their sales or profits. Given that their lower performance is due to decisions outside their control, companies should evaluate largely on those things that are controllable by personnel in different divisions.
Compatible Partners:
A company can identify potential partners by monitoring journals, attending technical conferences, and developing links with academic institutions. It can even find partners through social situations as acquaintances offer introductions to managers in other firms.
Negotiating the Arrangement:
In technology agreements,
• A seller does not want to give information without assurance of payment
• A buyer does not want to pay without evaluating information
Drawing up the contract:
Contracts with other companies cause some loss of control over the asset or intangible property that is transferred. A host of potential problems attend this lack of control and should be settled as much as possible in the original agreement. Mutual goals should be set so all parties understand what is expected, and the expectations should be spelled out in the contract. At the same time, not everything can be included in a contract. You need to develop sufficient rapport with partners so that common sense, along with the contract, plays a part in running the collaboration.
Improving Performance:
When collaborating with another company, managers must
• Continue to monitor performance
• Assess whether to change the form of operations
• Develop competency in managing a portfolio of arrangements
Contracting a compatible partner is necessary but insufficient to ensure success of a collaborative arrangement. Once an agreement is operational, it must be managed effectively. Management should estimate potential sales and costs, determine whether the arrangement is meeting quality standards, and assess servicing requirements to check whether the collaborative arrangement is meeting its goals and whether each partner is doing an adequate job.
Collaborations must overcome differences in a number of areas:
• Country cultures that may cause partners to obtain and evaluate information differently
• National differences in governmental policies, institutions, and industry structures that constrain companies from operating as they would prefer
• Corporate cultures that influence ideologies and values underlying company practices that strain relationships among companies
• Different strategic directions resulting from partners’ interests that cause companies to disagree on objectives and contributions
• Different management styles and organizational structures that cause partners to interact ineffectively