In a joint ventures, what are the ways it can be harmful?

Answer 1

Most commonly has to do with conflicts of power and money.

Answer 2

Joint ventures are successful if and only if there is trust and cooperation between the parties in the venture. Even tightly written contracts, plans, and agreements will not suffice to hold a joint venture together without these.

By relying on an outside organization (the joint partner), you:

* Have lost direct control over the processes and resources the partner contributes to the venture.

* Have taken on a corporate culture that might differ significantly from your own corporate cuture.

* Have taken on corporate management and administration by your partner that may prove to be incompatible with your own group.

* Have assumed extra logistics issues because of the inherent physical and technical, and corporate political and cultural gaps between your organization and your partner's organization.

There are other issues, but they all boil down to adverse differences between your own group and that of your partner. Due diligence in disclosure sessions between you and them may or may not uncover these differences.

In addition to the due diligence during disclosure, tightly written contracts and legal agreements can be useful for handling the differences. But, again, these are but pieces of paper and they are worth little without mutual trust and cooperation.