Unlocking International Joint Ventures

CHAPTER FOURSECURING INTERNAL ALIGNMENT:HOW TO AVOID DAMAGING ‘OWN GOALS’

‘A lot of good work can be accomplished when power and politics are aligned with strategy.’

– William A. Pasmore

Forming an IJV will inevitably involve managing a successful negotiation. It should be viewed as a great honor to be asked to be involved in such an endeavor. Unfortunately, the career limiting potential of being involved in an IJV negotiation is well known to any manager who has had exposure to one of these deals. The timeline can be long (sometimes measured in months but often years), the probability of completion is low and, if by some miracle, it all comes together, the resulting joint venture company has a high likelihood of struggling – especially in the first year or two. Then there are the internal politics…

4.1 ALIGNMENT

IJV negotiations are all about alignment. The Compelling Proposition concept from Chapter 2 is, to a large extent, about both attaining alignment strategically together with both parties recognizing that such alignment will be transient and will also evolve. To secure the JVC signing, the approvals must be completed, by both parties, before there is a shift in alignment that cannot be managed.

The central issue of alignment and the difficulty in having two parties agree on something is also why multiparty IJVs with three, four or more partners are so rare and so difficult to get over the line. Perhaps surprisingly getting the partners to a deal with alignment, ...