Joint ventures expert makes case for furthering foreign investment

By Jessica Fong

A world-class scholar in the realm of international business visited SFU Business on September 20 to discuss the growing area of joint ventures and Canadian foreign investment.

Paul Beamish, a professor of international business studies at the Ivey School of Business at the University of Western Ontario, shared his insights with an at-capacity crowd at SFU’s Segal Graduate School of Business in downtown Vancouver. His lecture was part of the school’s Distinguished Speaker Series sponsored by the BMO Endowment Fund.

Beamish, who has authored or co-authored over 50 books related to global business and international management, has conducted research into joint venturing since 1979.

As part of his presentation, he discussed major implications and processes of joint ventures — emphasizing the importance of preparing for entrance into such a business relationship.

Investors, said Beamish, should be able to confidently answer simple business questions, such as whether the business should go international or not, and if so, issues of timing and target markets need to be addressed. He further noted that it is always best to eliminate uncertainty in joint venture situations.

Professor Beamish also addressed biases against equity joint ventures – including those implying they are less profitable and difficult to manage. Beamish confidently challenged those perceptions and fears with empirical data from the Japanese market, showing that the reverse was in fact true.

One of the key themes touched upon by the Ivey professor in the joint ventures context was congruity. Above all of the market variables, which may impede the success of the joint venture, Beamish said the absence of congruity is at the top.

“The best joint ventures are the ones where you’re never referring back to the joint venture agreement,” he said. “It’s an agreement that’s gathering dust on top of a shelf someplace.”