Identification

• A joint venture is when two or more individuals or businesses cooperate to achieve corporate goals. A joint venture can be anything from two companies sharing technology and expertise for a new product to two salesmen cooperating to corner a new market. Joint ventures run the gamut from verbal agreements to legal contracts. Smart joint venture arrangements include some type of legal parameters, but a joint venture can exist without any. Joint ventures take place across any and all industries.
  
  

The Advantages of Sharing Risk

• One of the great advantages of having a corporate partner or another individual to help run your business activities is that it spreads out the risk of any business venture. If markets collapse or a hot new product receives a lukewarm reception, both you and your partner are on the line for the loss, instead of only you. A joint venture does not need to be permanent either: It can be established in a limited scope to reduce your risk in one area of your operations but maintain complete control over other parts of your business.
  
  

The Advantage and Disadvantage of Shared Expertise

• Another huge plus to establishing a joint venture is the sharing of expertise. Indeed, this may be the very reason for creating a joint venture operation in the first place. When individuals and companies join up, they share knowledge and operational skills. In short, they can teach each other a lot for the mutual gain of both. However, if expertise levels are severely mismatched, the sharing of expertise can be a disadvantage; it can reduce morale, lead to poor operational cohesion and leave certain parties performing all of the work.
  
  

The Disadvantages of Split Leadership

• While the point of a joint venture is to increase the number of stakeholders in a project, more than one stakeholder can confuse and mislead those working on the project. If two managers are in charge of a joint venture and they have different management styles, not only will feathers get ruffled, but company operations may actually be performed poorly or not get done at all. A project team under a single leader knows whom to look to for instruction. Joint ventures, especially those with many parties, don't have the same luxury.