Joint ventures predominate in business formats used by multinational corporations
in developing countries. It is believed that joint ventures in these countries
suffer more conflicts and performance problems than joint ventures in developed
countries. However, there is little empirical research into understanding the
nature of joint venture problems in less developed countries. Furthermore, what
little research exists examines the issue from the perspective of the parent
company at the expense of the local partner's point of view. The study reported
here is intended to fill this void. Specifically, the study examines severity of
various conflicts in Saudi-U.S. joint ventures operating in Saudi Arabia from
the perspective of Saudi partners. Three critical sources of conflict are
identified and analyzed in detail. The discussion concludes by recommending a
dynamic approach to conflict management with a special emphasis on developing
communication capabilities.
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