Author(s): Ajay Arora, Debasisha Mishra, Vibhas Amawate and Tapan K Panda
Alliances of which joint ventures and licenses are the two most common examples that gained ground since the decade of 1980s driven by the strategic needs of organizations. They became one of the most important organizational forms to emerge in the decade of to the year 2000. Various aspects of Joint ventures have been studied. Research has pointed out the high failure rate of JVs ranging from 50 percent to 70 percent. Several factors have been listed as the ones leading to the collapse of JV, from cultural differences to shareholding imbalance to conflict among the parents. Notwithstanding this, more practitioner and scholarly attention have focussed on what motivates corporate marriages than what accounts for JV divorce; the very process of dissolution has received scant attention from scholars and while examples of planned amicable dissolution of JVs exist, they seem to be the exception rather than the rule. Many theories have been proposed to explain the motivation and formation of the JVs, but few examine whether simply reversing the logic of IJV formation can sufficiently explain its termination. As alliances and JVs continue to be an integral part of the strategic plan of firms, but sustaining those remains a challenge, this research examines the key aspects around longevity of joint ventures and variables impacting longevity as given in extant literature. We challenge the conventional wisdom of higher performance leading to a longer life of JV. Our study contributes to extending the existing research around joint ventures by proposing a model which offers insights into factors responsible for longevity and the ones responsible for the venture to be successful in the journey of the firm, post termination of JV, from a managerial perspective.