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Abstract
This study explores South African managers’ expectations of prospective South African – United States international joint ventures. One hundred and three middle-level South African managers responded to a theory-based original survey questionnaire that included questions about various aspects of prospective US-South African joint ventures. US companies invest in South Africa to gain access to its market and South African companies get into joint ventures with US companies to tap into their financial resources. Tarrifs imposed by the US government and the South African government’s administrative barriers seem to be the most crucial problems for the prospective joint ventures. Implications for international managers are offered.
Highlights
“One doesn’t realise how different cultures can be until you visit another differing cultural society or nation”
South African managers believe that US partners have a single top-ranking objective: gaining access to the local market
To attract more US companies to invest in International Joint Ventures (IJVs) the South African government should stabilize the country legal system and work habits of South African workers are expected to undergo great improvement to adapt to US partners' requirement
Summary
“One doesn’t realise how different cultures can be until you visit another differing cultural society or nation”. This study explores South African managers’ expectations of prospective joint ventures with US companies. This topic is of great importance since the cumulative foreign direct investment in South Africa since 1994 to date is estimated at $18.4 billion (www.businessmap.co.za.), and the lion share of this foreign direct investment was in the form of joint ventures or buying into existing enterprises. There was very little foreign direct investment in new enterprises, a trend that hit hardest in the struggling black business sector in South Africa, giving the history of the nation. The economic sectors of activities in which joint ventures are most common in South Africa are research and development, national resource exploration and exploitation, engineering and construction, production/manufacturing, buying and selling and services (www.wwb.co.za). United States direct investment in South Africa reached $3.427B in 2002 (www.bea.gov/bea/ARTICLES/2003/09September/0903usd ia). (The search for information on the current business transaction was futile.)
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