In a joint venture, a management contract is often used as a control mechanism by firms, even if they hold only a minority position in the venture.

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A management contract allows a firm to have a certain level of control over a joint venture, even if they do not hold a majority position. It outlines the responsibilities of the management team and can include provisions for decision-making, performance evaluation, and compensation. This helps ensure that the venture operates in accordance with the goals and strategies of all parties involved.

In a Joint Venture, a Management Contract Is Often Used