With an estimated failure rate of 50 to 70
percent, international joint ventures (IJVs)
are inherently unstable endeavors. However, the advantages of
successful international joint ventures, mergers, and acquisitions
are significant enough that an increasing number of companies
continue to take the gamble to the tune an estimated investment of
more than $500 billion a year. Training and development departments
can play a major role in improving the likelihood of
What are the common causes of
Poor partner selection.
Differing strategic goals among the
partners--short, intermediate or long term.
Lack of effective integration between
Change in strategic objectives.
Unequal commitment or contribution by
Lack of trust.
Unclear or misperceived goals and
Poor selection of personnel.
Conflict between managers of parent
Local partner not assigning its best people to the
One partner being a government entity.
Divergent national interests.
Government changing the rules.
Inability to decide whose rules to follow.
Varying degree of autonomy.
Failure to adapt business practices to the local
Even with the prevalence of these many pitfalls,
training and development offices are rarely called in to be
strategic partners in international joint ventures, mergers, and
acquisitions. However, in the instances where training and
development has taken a proactive leadership role, its involvement
has significantly increased the chances for
What can training and development
departments do to enhance the success of an international joint
Train those involved in the selection of
Conduct corporate culture inventories between all
Explore potential obstacles and enablers.
Conduct a cultural due diligence and analysis of
Conduct a T&D due diligence and analysis of
all the parties.
Provide cultural training for all parties and
partners early in the process.
Provide a constant resource for all cross-cultural
questions that arise throughout the formation of the partnership
Support open internal communication processes
about the venture--rationale, people, and processes. Do this early
Provide team building for integration
strategies--help to create a unique corporate culture imbedded in
processes, procedures and business goals. Include timelines and
Help examine if all partners culture policies and
procedures contribute to productivity.
Establish locally sensitive policies and practices
for each office.
Develop a global development program with clear
links between expatriate assignments and career planning.
Outsource for the best international services when
Create global rotational programs to integrate
local country national managers into the broader corporate
Keep on learning. If any aspect of the IJV,
merger, or acquisition fails, conduct a post-mortem to find out why
and learn from past mistakes.
Share information across the business (and in all
Encourage and incentivize all team members to
share issues and solutions with one another.
The following is an actual case study of a
new international joint venture that is proactively utilizing
training and development executives to ensure
A new IJV comprised of four leading airlines
representing four nationalities needed to rapidly get the managers
from each airline to work effectively together. Each airline has
its own processes, procedures, and incentive practices. While it
may take years to harmonize all of these policies, they needed to
quickly overcome these differences by building trust within teams
needing to work together in spite of these potential
The joint venture took the proactive step of
delivering programs that helped team members better appreciate the
cultural nuances of each of the airlines and the national cultures
reflected in their management, decision-making, and communications
The solution was an intensive two-day program,
which brought representatives from each of the airlines together in
each of the four countries. In the workshops the participants
learned about each others corporate and national cultures and were
taught specific techniques to bridge the differences through
simulations and scenarios. Though this program represented a
significant investment in time for all participants and
organizations, the return-on-investment far outweighed the
If more IJVs, mergers, and acquisitions would take
a proactive approach training & development approach, such as
the airlines joint venture, and follow even a few of the
recommendations listed above, the failure rate of IJVs, mergers,
and acquisitions would surely decrease.
If you would like more details on this JV training
or have cases or best practices to share, please write me at