International Business Environment Report 2022

INERNATIONAL
BUSINESS
ENVIRONMENT

1
Executive Summary
Joint Venture allows the companies to make access to the new markets at a much faster rate.
This report illustrates the several benefits of Joint Venture. It is found that joint venture
enhances the economies of scale for the companies, it reduces the risks, and it improves the
knowledge of both the firms. This report also illustrates the difference in cultures between the
two countries with the example of India and United Kingdom. In the latter section of the
report the challenges faced by the firms in Joint venture has been elaborated. It was found
that managing partnership becomes difficult due to the communicational barriers, leadership
style differences, organisational culture differences, and market expectation from foreign
companies. In the end recommendation about the way in which Joint venture can be made
successful is elaborated where it was found that cross cultural training and defining of
policies so that stakeholders of both the companies respect each other’s organisational culture
is necessary.

2
Contents
Executive Summary..................................................................................................... 1
Introduction............................................................................................................... 2
Joint ventures............................................................................................................. 2
Cultural theories......................................................................................................... 3
1. Power Distance.............................................................................................. 4
2. Individualism................................................................................................ 4
3. Masculinity................................................................................................... 5
4. Uncertainty Avoidance.................................................................................... 5
5. Long Term Orientation.................................................................................... 6
6. Indulgence.................................................................................................... 6
Cultural challenges that is faced by the firms......................................................................6
Benefits.................................................................................................................... 8
Recommendation........................................................................................................ 9
Conclusion.............................................................................................................. 10
References.............................................................................................................. 10

3
Introduction
International business environment has changed drastically and there are many companies
that are crossing borders to do business. Among the various entry modes that are being
selected by the companies Joint venture stands to one of the most effective strategies that are
being used by the firms. There are many cultural barriers that arise in this process this is
because the culture of the companies are somewhat influenced by the culture of the nation
hence there is huge difference (Killing, 2013). There are people from different parts of the
world working in an organisation and hence organisational culture has to be developed
appropriately according to the difference in culture. This report is going to illustrate the Joint
Venture and its benefits. It also explains the cultural theories that are applied in the case of
Joint ventures. It also elaborates about the cultural challenges faced by the companies going
into Joint Venture. At last different aspects of the Joint ventures is being illustrated.
Joint ventures
Organisations crosses border to enhance their source of income and at the same time it also
enhances the profitability of the company. The increase of profitability and profit growth firm
can be achieved by adding value, lowering cost, selling more in the existing market, or
expand globally. Joint ventures are one of the highly used entry mode strategies that are being
selected by different companies so as to expand in the foreign markets (Kumar, 2010). Joint
venture is understood as the association of two independent enterprises to share resources and
risk on a temporary basis or permanent basis, for a particular project or for longer time.
Working as a joint Venture with foreign partner needs a critical selection of the country to
invest along with the risk and opportunity assessment of the same. It is also characterised by
shared governance and shared ownership. There are basically four points that an organisation
has in the mind to choose this as an entry mode strategy. They are also understood as the
benefits that Joint Venture provides to its business:
 It gives access to new market especially in the emerging markets: Since in some of
the nation 100% is not permitted hence it becomes critical for the management to find
a way in which they can do Joint Ventures to gain access of that market (Meschi and
Wassmer, 2013). For example Honda which was one of the major manufacturers of