In my book, A Guide to Global Joint Ventures and Alliances
published by Heinemann Asia, Singapore late last year,
now selectively available in India, in the introduction
to my book, I have shown the analogy of Joint ventures
and marriages and I have said that in a love marriage,
two people fall in love and emotions and passions are
the driving force towards them getting together and
the offsprings of these people act as a binding force
and learn to either give and take as they go along or
eventually end up in a divorce as is evident by the
increasing divorce rate. In many western countries,
the divorce rate is now reaching 50 to 70%. In an arranged
marriage, things are done much more carefully with a
mutual sizing up of partners by each other, by respective
guardians, parents, protectors, friends etc. The couple
gets into the alliance expecting to give more than they
expect to receive whereas in a love marriage they expect
to receive more than give. Hence, a joint venture should
be a bit more like an arranged marriage rather than
a love marriage.
the offspring can act as a binding force in a love marriage,
the offspring i.e. the product / project can become
the bone of contention in a business venture.
may appear glamorous and sexy for Indian companies to
woo partners with major international brand names /
global images in order to feel assured of success in
the marketplace. However, compatibility of partners
is the key issue.
Let us look at some of the key issues that one needs
to focus on in a Joint Venture:
Philosophy: What is the business philosophy
of the respective firm ? What are the foundation stones
of their businesses ? e.g. Is the business philosophy
one in which a company is looking for a long term position
in the marketplace with large investments and small
returns to build image, brand loyalty, quality, service
and settle for negative / nominal returns in the first
few years ? Does it have a long term vision which is
clearly defined and based on a mission that embodies
the philosophy of the firm. Is this business philosophy
compatible between the two intending partners or does
one firm seek quick returns because of shareholder pressures
or short term perspective of the owners ?
business philosophy of the firms will reflect their
attitude to external agencies. Towards government policy
they both scrupulous or is one party willing to take
shortcuts towards safety considerations, environmental
considerations, social obligations, the taxman.
they treat their customers as long term partner in their
business or does one partner see them as suckers for
the bottom-line ?
they value their employees ? Are they committed and
caring ? Do they expect to get ready people who can
give instant results?
went wrong with Proctor & Gamble and Godrej ?
One can conjecture that the Godrej culture as one which
is paternalistic and benevolent. This means that the
owners see their employees as part of their extended
families, that they don’t look for quick performance
and results. They develop people and give it a great
deal of importance. Proctor & Gamble, on the other
hand, is a hard nosed American firm that probably wants
everyone to deliver all the time and hence are these
two philosophies really compatible ?
another score, major companies such as Proctor &
Gamble are very strong on their systems and methods
and Indian family owned companies are not quite to the
same level of refinement.