A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration.

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1997

Political, social, industrial, economic and business environment in many countries push the joint venture form of strategic options for foreign investors. Foreign investment has flowed into Myanmar since it has changed from its previous socialist policy to a new market oriented policy. The majority of investments are in the form of joint venture, especially in the manufacturing sectors. Naturally, many problems and conflicts exist in the early stage of the open market economy. This research attempts to identify and analyze the problems and conflicts in the operation of joint ventures and to identify the factors that may influence these problems and conflicts. Data was collected from in-depth interviews with managers in seven joint ventures on the main manufacturing industries, such as garment, leather, beer and fruits canning. The data covers the broad range of operational areas such as general management, production management, human resource management, marketing management and financial management. According to the findings of the research, the roots of conflicts are due to the lack of mutual trust, different cultural values, different perception, background experiences and different management style. Problems are found especially in the area of capital contribution, human resources management and general management. Many of the problems and conflicts reduce the ability to achieve the goals of joint ventures. This research also shows that there are a few issues which may lead the failure of joint ventures. These are due to the business environment of Myanmar rather than the incompatibilities of both partners in operational management. The research also shows that most of the problems and conflicts stem from the consequences of the political situation, lack of experience of local partner in market economy and the lack of systematic economic policy in Myanmar. The findings of the research not only suggest both partners to be aware of the difficulties that may arise beforehand. They also help policy makers of Myanmar see what is needed to create a favorable investment climate for the smoothing the joint venture operations.