Learning from Failure: A Case Study of International Joint Venture Performance

This paper examines the causes of international joint venture (IJV) failure, focusing on the case of a failed IJV between a US industrial company and a Saudi Arabian conglomerate from the perspective of the Saudi partner. Our objective was to identify factors leading to the failure of this IJV and examine these in relation to existing research, which tends to include only the western partner’s perspective. Data were collected via semi-structured interviews with relevant senior management, supplemented by an indicative questionnaire and an examination of historical company records. Analysis facilitated by NVivo identified a number of key issues including the importance of developing, and building on, early stage trust and the apparent low emphasis placed by Saudi management on the role of cultural differences in precipitating failure. This contrasts with existing research and suggests a number of areas worthy of further study.