The Key Drivers of Foreign Partner Success — A Quantitative Analysis

Abstract

The case studies in Chapter 3 have established a number of key themes regarding partnership relations between foreign and domestic investors in a business environment such as Russia’s. The first and most significant is that in order to be successful for all the parties involved, partnerships need to remain in balance such that the bargaining power of the partners is relatively equal. If balance is lost and one partner establishes that, or even perceives that, his bargaining power is in the ascendancy then it is likely that the JV will fail and the “weaker” partner will lose out. In a Russian context it has been argued that a vital element in this balance is the issue of learning, and in particular the different learning patterns of the domestic and foreign partners about each other’s skills and key contributions to a joint venture. It was pointed out that foreign partner skills are relatively easy for the domestic partner to learn, or acquire, and that the foreign partner did not object to this learning, and indeed often encouraged it. Conversely, the foreign partner appeared to find it more difficult to acquire his domestic partner’s core skill, local knowledge of how to operate in an “asymmetric” business environment. However, as was also demonstrated, those who make the effort to increase their local knowledge tend to reap the benefits.