Global joint ventures : the Singapore experience

Overseas markets are important sources of growth and profits. Indeed, our Government have exhorted Singapore companies to go regional as an initial step for greater globalization, or the development of the external wing of our economy. A prominent trend is the increase in popularity of joint ventures as a mode of overseas investment by Singapore companies. This is evident from frequent reports in the newspapers detailing collaborations between Singapore companies and their foreign counterparts (mainly partners from the host country itself) in several big projects. Our final year project seeks to identify the broad issues involved in the setting up and management of joint ventures abroad by Singapore companies. For setting up of joint ventures, issues like the selection of the host country, the underlying reasons for the venture, avenues for sourcing of a partner, the attributes in the screening of a suitable partner, the likely problems to be encountered and the governmental incentives/support available for utilising are relevant considerations. As for the management aspect, the appropriate management structure to operate the venture is the major issue. It is clear that the bulk of the project's focus would be on the setting-up of the joint venture. We feel that getting started with a venture (rather than running it) could be of more concern to parties (especially Singapore companies) involved. For the project, we have conceptualised a framework encompassing a series of deliberations (issues mentioned above) and the various subtopics. We hope that the project (via a survey), could shed some light on the more pertinent subtopics within each issue. The subtopics highlighted could collectively be a useful guide for Singapore companies in their joint ventures abroad. To fulfill the above objective for our project, we conducted a survey on Singapore companies currently engaged in various joint ventures. Questions were put forward enquiring the surveyees of the broad issues as mentioned above- i.e. say for one issue identified (e.g. selection of a host country), what are the relevant factors/subtopics they would consider as important or less essential (e.g. the ranking of factors like political stability, general economic conditions etc). Other questions require the surveyees to choose from various alternatives instead of ranking (e.g. what are the sources for the prospecting of venture partners?). From the survey, we confirmed an earlier finding that joint ventures are the most popular mode of foreign investments for Singapore companies. Also, we affirmed the well-known fact that most overseas joint ventures by Singapore companies are situated in the Asian Pacific region. These are the two more interesting peripheral ("nice to know") discoveries from our survey. In addition, issues like the host country current/potential market size, the political stability, problem of governmental red tape/bureaucracy are just some of the whole host of critical issues that we identified through our survey.ACCOUNTANC