Question

Everything is an advantage of joint ventures except ________.

• A. the costs of a new project can be split between the companies involved
• B. manufacturing costs will be divided between the firms in the venture
• C. joint ventures between firms in different countries can create new market opportunities
• D. management of the joint venture will lead to disagreements.

Answer 1

The correct option is D management of the joint venture will lead to disagreements.

Although joint ventures avail the benefit of reduction in cost, easy entry in overseas market etc., management of joint ventures lead to disagreement due to conflict in the thoughts of the parties involved. Small disagreement may prove healthy for the business as it will force management to evaluate its decision more carefully but if all parties are regularly not satisfied joint venture may lead to failure.