Question

Which of the following is a disadvantage of joint ventures? A: Joint ventures with local partners...

Which of the following is a disadvantage of joint ventures?

A: Joint ventures with local partners face a high risk of being subject to various forms of adverse government interference.

B: It can lead to conflicts and battles for control between the investing firms.

C: Companies have only a short-term commitment to the foreign market.

D: It is generally the most costly method of serving a foreign market from a capital investment standpoint.

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Answer #1

The correct option is B: It can lead to conflicts and battles for control between the investing firms.

Joint Ventures can be described as a business arrangement, wherein two or more independent firms come together to form a legally independent undertaking, for a stipulated period, to fulfill a specific purpose such as accomplishing a task, activity, or project. In other words, it is a temporary partnership, established for a definite purpose, which may or may not uses a specific firm name.

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