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Unformatted text preview: Thoughexporting andjoint venture
arrangements may be more appropriate for low potential markets from a
risk reduction perspective, theymay not allow the strategic control, change,
and flexibility that are needed to secure long-term global competitiveness.
The presence of joint venture partners, in particular, cancreate an impediare
ment to strategic coordination. Their motivations often incongruent with
that of the investingfirm, which can lead to significant
and Doz 19871. On the other hand, firms can gain competitive advantage
by exploitation of the strategic options provided by integrated operations
[Kogut 19891. They can spot opportunities and threats that may be beyond
the horizon of individual operations; they can bring theull weight of their
resouTces to bear on selected competitors or markets; they can shift resources
easily; and theycan use the experience
gained in one country in another where it may be relevant.
In addition to the above strategic advantages,globallyintegrated firms
prefer complete control of their foreign operations because overall profit
maximization requires thattheir foreign ventures be tightly subordinated to
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- Summer '14