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Problems of Joint Ventures

The problems of joint ventures are as follows:

(i)    Each partner desires to have majority stake in the joint venture. The project may not takeoff if the parties to joint venture do not reconcile their claims.

(ii)    There are legal restrictions on foreign investment because of which some foreign companies do not want joint ventures with Indian companies.

(iii)    Differences in culture and stages of economic development of the countries to which the parties belong may also create operational problems for joint-ventures across national borders.

(iv)    There may be lack of proper co-ordination between the parties to joint ventures. This may hamper the effective functioning of the joint venture.

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