The great advantage of joint ventures is that the home company knows and understands the cultural environment better than that of a MNE. "Each member of the joint venture retains ownership of his or her property. And each member of the joint venture shares only the expenses of the particular project or venture… Joint ventures enjoy tax advantages over partnerships, too. Capital Cost Allowance (CCA) is treated differently. While those in partnerships have to claim CCA according to partnership rules, those in joint ventures can choose to use as much or little of their CCA claim as they like" (Ward 2011). The Starbucks Corporation has had great success with joint ventures in its expansion overseas. "In markets outside the continental United States (including Hawaii), Starbucks' strategy was to license a reputable and capable local company with retailing know-how in the target host country to develop and operate new Starbucks stores" (Starbucks case study: Public Company, 1999, McGraw-Hill). Local companies can help Acme negotiate local bureaucracy, deal with...
Given that the production facility will remain in the international location for many years, such 'fringe benefits' of goodwill and good publicity tip the balance in favor of using a joint venture to support the project.
Another factor that must be taken into consideration is represented by the business etiquette in China. Business etiquette in this country is significantly different than that of Western countries, but it is similar to other Asian countries. The analysis of business etiquette is based on the cultural dimensions that characterize the Chinese population. Same as in the case of other Asian cultures, China has a high long-term orientation, which means
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