Maximizing local profits in joint ventures overseas could be suboptimal from the overall view of the MNE.

Question

Quizplus · Accepted Answer

Joint ventures involve a partnership between two or more firms, often from different countries, to pursue a common goal. While maximizing profits in the short term may be the primary objective of the local partners in a joint venture, the MNE must also consider the long-term implications of the partnership on its global operations and reputation. Pursuing profits at the expense of other factors such as social responsibility, sustainability, and legal compliance could damage the MNE's image and reputation, leading to negative impacts on its global operations. Additionally, the MNE should consider the potential for knowledge transfer and technology sharing that could benefit its global operations in the long run. Therefore, prioritizing local profits in joint ventures overseas can be suboptimal from the overall view of the MNE.

Maximizing Local Profits in Joint Ventures Overseas Could Be Suboptimal