How to create a joint venture

A joint venture is a complex structure that has several levels of control and management. All its levels are interdependent and at the same time have different controls. During the merger, it is necessary to remember that initially these are two companies with different goals and objectives, and it is necessary to formulate a common goal with divided tasks in order to avoid confusion. It will also help to dispel uncertainty in achieving a goal that may be blurred due to insufficiently clear delegation of authority.

Instruction manual

1

The first step in creating a joint venture is to identify a common strategic line. It is imperative that companies work out a common direction in which they will move together. It is also necessary to identify a common goal to which they will strive both in the short and long term.

2

Create project workgroups. These working groups will have to be responsible for planning and implementing joint activities. They will be responsible for the separation of powers, control and management of the joint venture. An equilibrium composition is required from each participating company, otherwise the likelihood of uncoordinated actions is high.

3

In order to avoid uncoordinated actions, it is necessary to ensure full transparency of the actions that are carried out as part of the project. Enter the report form that should be used by each employee and the obligation to familiarize them with the head. In this case, the participants will clearly understand what is being done at the moment and at what stage the progress is.

4

Be sure to develop exit strategies from the joint venture. Of course, this is an undesirable option, but if the company begins to make a loss, the sooner the partners terminate the agreement, the better, otherwise they will both incur losses further.