Case Study MINI-CASE: Conflict between Canadian and Venezuelan partners A Canadian engineering company and a Venezuelan firm are holding negotia- tions to set up a joint venture in Venezuela to produce and market a range of domestic electrical products. The Canadian negotiating team points out that their patents, know-how and trademark are very well known internationally and would help the IJV market its products throughout South America. The Venezuelan team responds positively to this argument and on this basis agrees to the Canadian negotiators' proposal that the IJV should pay a fee to the Canadian company to use the trademark. After several more rounds of negotiation, the two firms sign an agreement to establish a 50/50 joint venture. But the IJV starts to experience problems almost immediately. Within a few months of the IJV company's becoming operational, Canadian managers in the IJV are becoming embroiled in culturally loaded disputes with their Venezuelan counterparts. The two sides start to blame each other for poor marketing and procurement decisions and for unrealistic production sched- uling. A more basic problem is how the IJV managers can achieve a better understanding of a market that is becoming more complex by the day. Some of the complexity arises from a trickle of new government regulations, and also from intense competitive pressures as other local and foreign manufacturers jostle for a piece of the market, Matters are brought to a head when the Venezuelan parent company learns that many of the Canadian company's patents have in fact expired so that their value is considerably less than was assumed during the negotiations

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