Table of Content
ABSTRACT 1
1 INTRODUCTION 2
2 INTERNATIONAL JOINT VENTURES ORGANIZATIONAL STRUCTURE 3
2.1 PARENT FIRMS, IJV MANAGERS RELATION 3
2.2 PARENT FIRM’S RELATIONS 4
3 RIGHTS, FUNCTIONS OF BOD, PARENT FIRMS, IJV MANAGERS 6
3.1 PARENT FIRM’S RIGHTS, FUNCTIONS 7
3.2 BOD’S FUNCTIONS IN IJV 9
3.3 IJV MANAGER’S DUTIES 10
4 CONCLUSION 12
REFERENCES 13
Abstract
This paper figures out IJV structure and mechanisms such as principal agency problems and hold–up problem in International Joint Ventures. Thereby it is appropriated to examine the relationship between the parental firms, and how they can elaborate the operation of the Board of Directors and the Joint Venture managers. This refers to an organization of activities, which had to be done in a single company, and now has to assimilate of two distinct companies. Specifically, by designing contracts and control mechanisms of BOD and parent firms, IJV is less likely to encounter with agency and hold up problem.
Key Words
Agency problems, hold-up problem, formal control, behavior control, Board of Directors, parent firm, IJV managers, complete contract.
1 Introduction
Forming joint ventures become a common way to enter a new foreign market. However, it is not the easiest option to take, because it holds potential problems. The different cultural ...