An economic and business strategy analysis of joint ventures between Greek enterprises and enterprises in the Balkan countries and Russia : from the Greek parent company perspective

Abstract

This thesis analyses joint ventures which have been established between Greek enterprises and enterprises from Albania, Bulgaria, Romania and Russia. An international joint venture (IJV) is an enterprise established between two or more companies, one of which exercises its entrepreneurial activities in a foreign country. The core set of questions that this thesis addresses consist of motives for the establishment of joint ventures, partner selection criteria, control and conflict inside a joint venture, stability and performance. Another issue addressed is that of the problems which joint venturers face, as identified by Greek businessmen and academics. This framework is deployed upon an extensive body of primary source data gathered in 1994 by field work methods, using an administrated questionnaire largely within the Greek parent companies. Our research relates to evidence on 44 Greek enterprises, groups of companies, or individuals who established joint ventures with Eastern European partners after 1989. The questionnaire design is based on the notion that the expansion of the domestic boundaries of the firm abroad, and its decision to establish an IJV are the outcomes of strategic, financial and country specific motives. The key results of the thesis are that successful joint ventures in Eastern Europe have the following characteristics: 1. Dominant control by the Greek partner over the IJV, when the Eastern European partner is a bureaucrat. 2. Low perceived conflict as regards intensity and frequency over dimensions like transfer of knowledge. 3. High stability as measured by the percentage increase in share capital held by the Greek partner and by resistance to transformation to wholly owned subsidiary status of the IJV. 4. Good perceived financial performance. 5. Evolution of the IJV such that the Eastern European partner increasingly takes on a managerial role and becomes attuned to managerial modes of behaviour. 6. Shared decision making between partners to the IJV beyond the infant stage.