Creating a Joint Venture

In the event of a cross-border merger or acquisition, participating organizations need to fully understand the differences in cultural issues of each country in order to make a joint venture (JV) successful. Each country has a culture of a different country. It ultimately needs to be recognized and resolved as it will affect the working culture of their newly formed fusion organization. Geert Hofstede has developed a model to understand how work values ​​are influenced by culture.

PepsiCo entered India in 1989 through a joint venture with Papua Agricultural Industry Punjab State Government (PAIC) and Voltas India Limited. The joint venture sold PepsiCo until 1991 when foreign brands were granted, and in 1994 bought a partner to close the joint venture. PepsiCo has gained a high reputation in the international market with a joint venture approach to the international market. Therefore, it can be said that the method adopted by the company as a foreign market entry mode is effective and appropriate for realizing the company's strong competitiveness in the international market. The company employs an appropriate market entry model to ensure that its products are supplied to the international market.

An international joint venture between two or more companies can gain more resources and knowledge sharing, as well as reward and risk sharing. The reason for establishing a joint venture will be brought about by the development of new products, access to wider marketing opportunities, or companies expanding company headquartered in at least one external business country (the country where the company is located). The authors believe that before the joint venture is established, the host country needs to decide the political process prohibiting effective joint venture partnership. One example of the political problem affecting the United Nations is political inconsistencies and differences between foreign partner governments and recipient governments. Even if our partner's skills, organizational policies, and goals are in line and cooperation, this will have a major impact on business contracts.