Issues or disadvantages of joint ventures in E-business


By

Nikhlesh Matnani
Management Student
Aravali Institute of Management
 


Income and Resource sharing

Income and resource are two most important problems which is faced by the many of the organization either it is virtual or real. The main aim of building e-partnerships and joint venture in e-business is to generate more and more revenue by utilizing online resources and network. Revenue sharing becomes the most important issue in e-partnerships and virtual organizations when productivity increases and revenue goes up. The nature, timing, and amount of profit they are earning inclusive of all the revenues and commission create a problem that how it should be distributed between partners.

Using intellectual assets and transferring it

Intellectual assets are the core competencies of the organization which consist of skills, process, knowledge, methods which give advantage to one firm over others. They are intangible and an integrated part of a company's intellectual capital and un-tradable assets rather than legally protected intellectual property. Collaboration between two parties provides platform to use the intellectual assets and core competencies of other organization which in turn can be used in wrong way   and can be dangerous for the organization owning it. This opportunity is particularly valuable for innovative business such as e-business. Transferring and sharing of core competencies and intellectual capital of the organization may lead to leakage of the information and methods.

Power sharing

The decision making ability or authority depends upon the equity holdings in online venturing. It should be noted that the disputes between  two party arise due to holding of equity  in turn it create inter-organizational conflict which create or treated as biggest loss to organization although authority, accountability, and responsibility is clearly defined in the contract. Total quality participation is the solution for this problem where both organizations have equal chance of participation.

Efficiency of communications

Communication plays important role in e-business but it create problem when company is in inter-departmental collaboration. Where people share equal responsibility and that create tension and finally it led to conflict. Networking and communication plays an important role in this type of joint venture where people clearly define the process of the communication.
 


Nikhlesh Matnani
Management Student
Aravali Institute of Management
 

Source: E-mail November 3, 2010

 

           

 

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