Impact of International Joint Ventures on Organizations in China

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Introduction
As discussed by Alon et al. (2016), international Joint Ventures or IJVs are mainly
developed when two organizations are able to develop a partnership based on their operations
in two or more than two countries. The company mainly aims at exploring the international
trade based activities that have an impact on the cross border based business transactions. The
options based on the proper development of the joint ventures are mainly related to the
minimisation of risks and the acquisition of business operations as well (Beugelsdijk et al.,
2018). The development of international business operations is based on the effective
performance of due diligence on foreign countries. The risks that are a part of the operations
of different international organizations are minimised in an effective manner with the help of
cross-border based business transactions. The IJVs are able to provide major levels of support
to the companies based on the proper development of strategic alliances that can help in the
development of a sustainable competitive advantage (Clampit et al., 2015).
The essay will be based on the development of international joint ventures and their
impact on the ways by which the organizations are able to develop their positions in the
industry. The issues that are faced by the organizations based on cultural differences that
exist between the two countries will be discussed in the essay in detail (Connelly et al.,
2018). The analysis will be based on the issues that have taken place in the organizations that
operate in China and the other countries. The development of competitive advantage by the
organizations in the industry is considered to be an important part of the process of
international joint ventures that have been developed by the international organizations in
different parts of the world (Cuervo-Cazurra, 2016).
Importance of the issues

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As discussed by Dai and Nahata (2016), the development of joint venture mainly
implies that the firms need to cooperate with the partners who different cultural backgrounds.
The organizations that enter different countries with the help of international joint ventures
have different advantages in comparison to the wholly owned subsidiaries in different parts
of the world. The IJV mainly allows the organizations to share the different risks and costs
based on foreign entry and also to use the knowledge that has been gained by the knowledge
of the local partners (Del Giudice et al., 2017).
As argued by Deresky (2017), the local needs and tastes of the consumers and the
business practices. The IJVs on the other hand are also able to entail the levels of risks based
on the potential problems based on proper levels of cooperation with the partners. The
national culture is able to affect the ways by which different organizations are able to operate
and maintain the levels of profitability as well. Different ambiguities have been developed in
relationships due to the high levels of cultural differences (Gnyawali et al., 2016). Some of
the differences that exist in the cultural backgrounds can have an impact on the ways by
which the organizations are able to develop their positions in the industry. The national
culture on the other hand can be quite disruptive for the maintenance of the operations of
international joint ventures (Hitt, Li & Xu, 2016). The study based on the differences that
exist between the national cultures is based on the proper implementation of Hofstede’s
model. The research based on five dimensions of Hofstede’s model has been based on the
analysis that had been carried out between the years 1967 and 1978 (Jones, Harrison & Felps,
2018).
The survey was mainly based on the ways by which foreign subsidiaries that have
been developed by IBM. The national cultural differences had mainly taken place in different
countries based on the five major dimensions that have been developed by Hofstede. The
different aspects of Hofstede’s cultural dimensions mainly include, power distance,

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uncertainty avoidance, masculinity and individualism (Koch et al., 2016). The dimensions are
able to provide a major explanation based on the ways by which different aspects of the
national culture are able to affect the levels of operations of the international organizations.
The researches that have been made based on the analysis of international business operations
have a major impact om the international business operations (Le Nguyen, Larimo & Ali,
2016).
As discussed by Leonidou et al. (2017), the concept of cultural dimensions is able to
affect the analysis that is based on the proper operations of international organizations in
different parts of the world. The survival of the business in the international locations are
totally based on the effective levels of cooperation of the organizations that has been
developed in different parts of the world (Li et al., 2016). The two aspects based on the power
distance and the individualism are related to the issues of internal integration and ways by
which the relationships with the personnel that have been developed. The US multinational
organizations have not been able transfer the cultural values based on the power distance and
the levels of individualism in different countries (Mamic, 2017).
Literature review
As discussed by Mata and Portugal (2015), the reforms had taken in the People’s
Republic of China or PRC economy from the year 1979. The growth that has been
experienced in the economy of the country is considered to be the direct result of opening of
different Chinese economies to the foreign investors. The joint ventures in China have been
able to gain about two-thirds of the 300000 foreign investment based projects that have been
approved in an effective manner by the Chinese authorities (Reilly & Williams, 2016). China
is a major country that has been able to attract the foreign investments from different parts of