Trojan Horse or Workhorse

‘Trojan Horse’  or ‘ Workhorse’ ?

The evolution of U.S.- Japanese Joint Ventures in the USA

J-F Hennart, Thomas Roehl and Dixie S. Zietlow

Introduction :

← Rapid growth of Japanese FDI in the U.S.A.

← 1st significant investment by a non-Western nation ((Japan)

← Suspicion: Lot of authors suspect that the Japanese firms’ behavior disadvantages their partners (in a J.V.)

← Authors found out that the Japanese partner was:

( Good at learning from their partner (US/EU partner)

( Once the learning is complete

( Japanese partner has no reason to continue the JV

( JV end up by being liquidate/acquire (by buying the US stakes of his partner) by the Japanese partner( the venture is OVER

(JV is a way for Japanese firms to penetrate the US market

(JV are used by Japanese firms as Trojan Horses ( like the computer virus, they end up by taking control of the JV) to penetrate the US market

( Trojan Horses:

[pic]

.

Japanese JV as Trojan Horse:

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Pessimistic Scenario for Japanese-US JV.

Those 4 authors view the Japanese-US JV as a bad thing!

1) Reich and Mankin:

[pic]

2) Hamel:

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Hamel have interviewed managers of nine international joint ventures between Japanese firms and European or American partners.

One of the interviewed manager told him:

“ if one of our partners learn what we know BEFORE we learn what they know, we become redundant, we have got to try to learn faster than they do”

According to Hamel:

Ability to learn depends on 3 factors:

- Intent:

= Does the firm view the joint venture as an opportunity to learn, or as a source of cheap products?

Hamel suggests an asymmetry between Western and Japanese partners: the Japanese show explicit learning intents not shared by their Western counterparts.

- Transparency (accessibility): of the partner.

= the degree to which the knowledge possessed by the firm's employees is open and accessible...