They suggest that it contains the majority of elements that a partnership has only that it defines the period that it will end. However, joint ventures have been said to have their own predicaments. This paper describes the joint venture of SynChem and Henlin Biotech in utilizing their power in chemical research in technologically upgrading the chemical industry in China. This happened after SynChem had submitted their first application for a patent after discovering the linker technology anti-body drug conjugate (ADC) (Cheng, p.76). The paper additionally describes the benefits and/or problems that all of one of the participants in the joint venture. Finally, it discusses how the joint venture could be set up in such a way so that it still produces the potential benefits but avoids some of the pitfalls inherent in such projects. 2.0 Benefits and Pitfalls The chairman, president and other esteemed guests from Henlin Biotech visited the offices of SynChem with an intention of negotiating a joint venture with the company on upgrading the chemical industry in China. These visitors said that by combining their capabilities in research, both companies would greatly benefit in modernizing or upgrading their technologies. There are numerous benefits or pitfalls that such a joint venture may encounter during the course of executing business. The companies in the joint venture may benefit by making local contacts with people who have a greater understanding of the problems that technology is having within the Chinese chemical industry (Ekvall & Evan, p.90). These local contacts may help the companies in building closer relationships with other players in the industry who may bring in additional information and resources for the benefit of the joint venture. Both of these parties that are involved in the joint venture may in turn gain experience on the matters affecting the industry in addition to becoming more familiar the rules or practices used within the Chinese chemical industry (Bouchikhi & Kimberly, p.112). The joint venture that SynChem and Henlin Biotech are into will greatly benefit both companies that have combined their talents along with resources for achieving their objectives (Cheng, p.88). This is mainly because the companies will be able to pool together their individual workforces, equipment, finances and expertise in overcoming any risks that they may encounter in the industry. Both of the companies in the joint venture may also be able to obtain additional capital sources for facilitating their activities. Their joint venture will enable them to have stronger capital bases from which they can draw finances, additional cash or contributions on their capital from the shareholders within them (Hamilton & Zhang, p.165). The move would greatly enable them in preventing shortages of cash which may hamper their activities or the profitable completion of their projects. The companies within this joint venture which are SynChem and Henlin may additionally benefit through their increased bidding powers and bonding capacities. The companies combined efforts may assist them in attaining more powers when making bids in future projects. This is because the companies in the joint venture may have an extra ability of raising the resources and finances required to complete various projects (Campbell, p.87). Since SynChem is more experienced and
Institution Date Hierarchies, Incentives and Firm Structure Question C 1.0 Introduction Developments carried out in the bio-tech or high-tech fields in the production of new products or services may perpetually involve the combination of a highly specialized set of skills or techniques from different fields…
Capital structure theories have developed framework for defining aspects and patterns of capital structure as well as response to changing dynamics and hence, owing to the financial crisis and distressed period the capital structure of the firm have also shown responses.
Organizational structure plays an important role in determining the success of a company and the case of Microsoft is not an exception. Divisional structure, matrix structure, hierarchical structure, bureaucratic structure, functional structure, etc are some of the prominent organizational architecture in the current business world.
For instance, in U.S teachers are being awarded with promotions and other benefits as a form of motivation based on their work track records. However, some argue that such practices end up resulting to financial crisis around the globe. Basically, incentives are benefits that are offered with an aim to encourage an employer according to the work they have done.
Monopoly: This occurs easily when the economies of scale exist all through the range of production as then large firms succeed in having output at lower costs than smaller firms. This can be seen in the cost of production graph given in graph 1. In the initial stages, there are a large number of small firms starting production at about the same time.
By analysing the ownership structure of the firm, agency theory provides an explanation for firm failure and performance. In theory, the alignment of interests between the principals (owners) and agents (managers) entails agency costs that affect firm value, so firm value can be maximised to the extent that principals and agents minimise agency costs.
Perhaps, American IT Company Microsoft is the only company in the world, which enjoys absolute monopoly in the market. No other companies in the operating system market are strong enough to challenge the supremacies of Microsoft. It is widely believed that one of the major success factors of Microsoft is its divisional organizational structure.
Ordinary least square (OLS) with fixed effects panel models are employed. The analysis is done using two measures of performance including return on assets (ROA) and Tobin’s Q. The impact of firm specific variables such
ences and that the modes of internal organization, such as the use of hierarchies to coordinate individuals, are different to price-coordinated market transactions (Curwen, 2012: p49). This theory encouraged the elaboration of hypotheses about what firms are, as well as what
The author states that all citizens demand healthcare services; therefore, the government intervenes by supporting healthcare facilities. The government may give economic incentives to healthcare providers through tax-free imports of medical facilities, tax holidays, and financial support with the aim of improving the quality of healthcare.
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