The joint venture

Working relationships between noncompeting companies are quite popular these days and may become even more so in the future. The usual arrangement is a joint venture, which is a form of temporary partnership whereby two or more firms join in a single endeavor to make a profit. For example, two or more investors may combine their finances, buy a piece of land, develop it, and sell it. At that time, the joint venture is dissolved.

Many small businesses are using their research and development capabilities to form joint ventures with larger companies that provide them with marketing and financial clout, as well as other expertise.

According to Toby Walters, research manager for the Joint Venture Database, corporate partnering arrangements are increasing. He says, “It's more common in high-tech industries, companies involved with the informa-tion superhighway, and the communications companies.” Those who are interested in finding a corporate partner to form a joint venture are advised to contact the executive director of the trade association representing the industry they are targeting.

Joint ventures are becoming quite popular in global operations. This trend is especially noticeable in China and Vietnam, as well as Russia, since those areas are trying to attract U.S. capital. For example, six Russian joint ventures involving Western partners received tax breaks on oil exports in late 1994. While five of the partners were relatively well-known companies, the sixth was Aminex PLC, a small firm registered in Dublin, Ireland, but operating from the United Kingdom. It exported 380,000 barrels of Russian crude to the West from the Komi Republic during December 1995.

In summary, in an endeavor where neither party can achieve its purpose alone, a joint venture becomes a viable option. Usually, income derived from a joint venture is taxed as if the organization were a partnership.

EXERCISES:

Ex. 1. What type of organization is each of these?

1. A group of engineers who work together to provide consultancy and design services. There are no outside shareholders.

2. A large British engineering company with 30,000 employees. Its shares are bought and sold on the stock market.

3. An American engineering company with outside shareholders.

4. An engineer who works by herself providing consultancy. She works from home and visits clients in their offices.

5. An independent British engineering company with 20 employees. It was founded by three engineers, who are shareholders and directors of the company. There are five other shareholders who do not work for the company.

Ex. 2. Combine a word or expression from A with one from В to complete the gaps in the passage below. You may need to change the form of some of the words. Definitions are given in brackets to help you.

A	B
overcome set up raise take on (x2) turn down run	a partner finance a business hurdles a request a risk the challenge

Half a million people (1)_____ (start a company) each year in the UK, even though they (2)_____ (face the danger) of failing. Statistics have shown that within three years, 45% of them go out of business, many losing all their money. What sort of people want to be entrepreneurs when there is such a high failure rate? They tend to be motivated, creative and eager to (3)_____ (accept something that is difficult but interesting) of being their own boss. They are resilient and able to (4)_____ (find ways around problems) when, for example, the bank (5)_____ (rejects an application) for a loan. Instead of giving up, they will look for other ways to (6)_____ (obtain capital) such as (7)_____ (engaging a business associate).

Ex. 3. Match the sentence beginnings (1-5) to the correct endings (a-e).

1. British companies donate around £500 million a year to charities 2. She organized fund-raising 3. Voluntary sector employees earn five to ten per cent 4. Non-profit organizations are not to be confused 5. Research shows that volunteers give the best service

a) with loss-making companies! b) in cash and, increasingly, as goods, services and time. c) parties for the charity. d) when they are helping people in their own social class. e) less than they would in the private sector.

Ex. 4. Fill in the gaps with the words and expressions from the box below.

A.

demutualization building societies mutuals member life insuarance companies demutualized

Some companies, like certain (1)_____, are (2)_____. When you buy insurance with the company you become a (3)_____. Profits are theoretically owned by the members, so there are no shareholders.

In Britain, another kind of mutual is (4)_____, which lend money to people who want to buy a house. But a lot of building societies have (5)_____: they have become public limited companies with shareholders. This process is (6)_____.

B.

charities donations voluntary sector fund-raising volunteers non-profit organizations / not-for-profit organizations donate

Organizations with “social” aims such as helping those who are sick or poor, or encouraging artistic activity, are (1)_____ (BrE) or (2)_____ (AmE). They are also called (3)_____, and form the (4)_____, as they rely heavily on (5)_____ (unpaid workers). They are usually managed by paid professionals, and they put a lot of effort into (6)_____, getting people to (7)_____ money to the organization in the form of (8)_____.

Дата добавления: 2015-10-29